Problem 1:

Gallo Light began operations in 2021. The company sometimes sells refurbished warehouses on an installment basis. In those cases, Gallo Light reports income in its income statement in the year of the sale. In its income tax return, though, Gallo Light reports installment income when cash is collected. Installment income in 2021 was $90,000, which Gallo Light expects to collect equally over the next three years. The tax rate is 30%, but based on an enacted law, is scheduled to become 35% in 2023. Gallo Light's pretax accounting income from the 2021 income statement was $830,000, which also includes $40,000 of interest revenue from an investment in municipal bonds. There were no differences between accounting income and taxable income other than those described above.

Refer to Problem 1. If Gallo Light had $1,000,000 in pretax income in 2022 and no other transactions causing deferred tax differences, determine the following for 2022. Requirement (1) Determine Gallo Light's 2022 Tax Payable, Deferred Tax, and Tax Expense. (2) Prepare the appropriate journal entry to record Gallo Light's 2022 income taxes. INFORMATION Journal Entry