Question 1 SEB Corporation was started on January 1, 20X1. On that day, it purchased a machine for $240,000. The machine has an estimated life of 3 years and no salvage value. It will be depreciated for book reporting (GAAP) using the straight-line method. For tax reporting, the allowable deductions for depreciation are: 20X1: $110,000 20X2: $70,000 20X3: $60,000 The company's pretax book income before depreciation, which was the same as its taxable income before depreciation, was $400,000 for 20X1 and $260,000 for 20X2. Income tax rate is 30% for all years. The company's practice is to first record the annual tax due as income tax payable and later pay it in cash. a) How much would the company record as income tax payable for 20X1 and 20X2? Income tax payable, 20X1: $87,000 Income tax payable, 20X2: $57,000 b) What is the difference between the book basis and tax basis of the above asset at the end of 20X1 and 20X2? (Write as a positive number if book basis > tax basis and a negative number otherwise.) [Book basis Tax basis] as of 12/31/20X1: $30,000 [Book basis Tax basis) as of 12/31/20X2: $20,000 c) What is the deferred tax liability to be reported on the balance sheet at the end of 20X1 and 20X2? Deferred tax liability as of 12/31/20X1: Deferred tax liability as of 12/31/20X2: Need Help with C and D d) Calculate the income tax expense to be reported by the company for 20X1 and 20x2. Income tax expense, 20X1: Income tax expense, 20X2