*Problem 115 The following information is available for the first three years of operations for Cooper Company: 1 Year Taxable Income 2017 $410,000 2018 260,000 2019 310,000 2. On January 2, 2017, heavy equipment costing $510,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2017 2018 2019 2020 Total $168,300 $229,500 $76,500 $35,700 5510,000 3. On January 2, 2018, $273,000 was collected in advance for rental of a building for a three-year period. The entire $273,000 was reported as taxable income in 2018, but $182,000 of the $273,000 was reported as uncared revenue at December 31, 2018 for book purposes 4. The enacted tax rates are 40% for all years. Prepare a schedule comparing depreciation for financial reporting and tax purposes. (Enter negative amounts using elther a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Depreciation for Financial Depreciation for Reporting Tax Purposes Year Temporary Difference 2017 $ 2018 2019 2020 2021 $ Determine the deferred tax (asset) or liability at the end of 2017. Deferred tax Prepare a schedule of future taxable and (deductible) amounts at the end of 2018. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) for Financial Depreciation for Reporting Tax Purposes Temporary Difference Year 2017 2018 2019 2020 2021 $ Determine the deferred tax (asset) or liability at the end of 2017. Deferred tax s Prepare a schedule of future taxable and (deductible) amounts at the end of 2018. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) 2019 2020 2021 Total Future taxable (deductible) amounts: Depreciation $ S Rent Prepare a schedule of the deferred tax (asset) and liability at the end of 2018. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Deferred Tax Tax Rate (Asset) Liability Future Taxable Temporary Difference (Deductible) Amounts Depreciation S $ Rent Totals $ Compute the net deferred tax expense (benefit) for 2018. $ Net deferred tax for 2018 Prepare the joumal entry to record income tax expense, deferred income taxes, and income tax payable for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Income Tax Expense Deferred Tax Asset Income Tax Payable Income Tax Expense Question Attempts: 0 of 1 used