Question 3 The following information is available for the first three years of operations for Faberge Corporation: 1. Year Accounting Income 2017 $250,000 2018 180,000 2019 200,000 2. On January 2, 2017, equipment was purchased for $500,000. The equipment had an estimated service life of 5 years and no residual value. Straight-line depreciation is used for book purposes and CCA at 30% is used for tax purposes (subject to the half year rule for the first year). 3. On January 2, 2018, $210,000 was collected in advance for the rental of a building for three years. The entire $210,000 was included in taxable income in 2018, but two-thirds of the $210,000 was reported as unearned revenue at December 31, 2018 for book purposes. 4. The enacted tax rate is 40% for all years. Required: a) Prepare a schedule comparing depreciation for book purposes with CCA for tax purposes (for 2017 - 2019). b) Determine the deferred tax asset or liability at the end of 2017. c) What is the deferred tax asset and/or liability at the end of 2018? d) Prepare the adjusting journal entries to record income tax expense, deferred taxes, and income tax payable for 2018. CS Scanned with CamScanner I English (Canada) Focus