Question 1

The accounting income of Ayayai Corporation and its taxable income for the years 2020 to 2023 are as follows:

Year		Accounting Income			Taxable Income			Tax Rate
2020		$461,000			$300,000			25%
2021		421,000			295,000			30%
2022		391,000			305,000			30%
2023		461,000			641,000			30%

The change in the tax rate from 25% to 30% was not enacted until early in 2021. Accounting income for each year includes an expense of $41,000 that will never be deductible for tax purposes. The remainder of the difference between accounting income and taxable income in each period is due to one reversing difference for the depreciation of property, plant, and equipment. No deferred taxes existed at the beginning of 2020.

Calculate the current and deferred tax expense or benefit for each of the four years. Also calculate the balance of the deferred tax balance sheet account at the end of each fiscal year from 2020 to 2023.

Prepare the bottom of the income statement for 2021, beginning with the line Income before income tax.