Problem 3 (48 points) Your boss gives you the following information about Gunner Corporation and asks you to compute Gunner's tax provision for 2018 (see specific questions below) Book income before federal income taxes is $700,000 The following items have been included in book income: Book depreciation of $300.000 and MACRS depreciation is $200,000 Temp untov Bad debt expense using the reserve method of $20,000. Temp unfou $120,000 from the proceeds of a life insurance policy on a key executive.perm fav Entertainment expense of $10,000.perm unfau Here are some additional facts: MACRS expense is $200,000 Net charge-offs of receivables for the year are 15,000. Gunner sold a piece of property and recognized a book gain of $100,000 temp for that is included in book income. This gain qualifies for the installment saley treatment for tax purposes. The entire gain will be recognized in 2019 for tax purposes The corporate tax rate is 20%. 1. What is Gunner's taxable income? 2. What is Gunner's current income tax expense? 3. What is Gunner's deferred tax expense? 4. What is Gunner's total tax expense? 5. Does the difference between book and tax bad debt expense result in a deferred tax liability or a deferred tax asset on Gunner's balance sheet? 6. Prepare a rate reconciliation