Problem 3. The following differences enter into the reconciliation of financial income and taxable income of Bobcat Company for the year ended December 31, 2021, its first year of operations. The enacted income tax rate is 40% for all years. (20 points) Pretax accounting income 900,000 Warranty expense was not tax deductible in 2021 but 2022 100,000 Excess tax depreciation (520,000) Litigation accrual 170,000 Unearned rent revenue deferred on the books but appropriately recognized in taxable income 150,000 Interest received on government obligations (50.000) Taxable income 750,000 1. Excess tax depreciation will reverse equally over a four-year period, 2022-2025 2. It is estimated that the litigation liability will be paid in 2025 3. Rent revenue will be recognized during the last year of the lease, 2025 4. Interest received on government obligations is expected to be $50,000 each year until their maturity at the end of 2025 Instructions (a) Prepare a schedule of future taxable and (deductible) amounts reversal from 2022 to 2025 (b) Compute the deferred tax (asset) and liability. Show your computation details (c) Since this is the first year of operations, there is no beginning deferred tax asset or liability Compute the current income tax expense under the tax accounting and financial accounting. (d) Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2021 Problem 3. The following differences enter into the reconciliation of financial income and taxable income of Bobcat Company for the year ended December 31, 2021, its first year of operations. The enacted income tax rate is 40% for all years. (20 points) Pretax accounting income 900,000 Warranty expense was not tax deductible in 2021 but 2022 100,000 Excess tax depreciation (520,000) Litigation accrual 170,000 Unearned rent revenue deferred on the books but appropriately recognized in taxable income 150,000 Interest received on government obligations (50.000) Taxable income 750,000 1. Excess tax depreciation will reverse equally over a four-year period, 2022-2025 2. It is estimated that the litigation liability will be paid in 2025 3. Rent revenue will be recognized during the last year of the lease, 2025 4. Interest received on government obligations is expected to be $50,000 each year until their maturity at the end of 2025 Instructions (a) Prepare a schedule of future taxable and (deductible) amounts reversal from 2022 to 2025 (b) Compute the deferred tax (asset) and liability. Show your computation details (c) Since this is the first year of operations, there is no beginning deferred tax asset or liability Compute the current income tax expense under the tax accounting and financial accounting. (d) Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2021