Sheridan Corp. sold an investment on an installment basis. The total gain of $76,800 was reported for financial reporting purposes in the period of sale. The company qualifies to use the installment-sales method for tax purposes. The installment period is 3 years; one-third of the sale price is collected in the period of sale. The tax rate was 40% in 2017, and 35% in 2018 and 2019. The 35% tax rate was not enacted in law until 2018. The accounting and tax data for the 3 years is shown below.

Problem 19-7 Sheridan Carp. sold an investment on an installment basis. The total gain of $76,800 was reported for fnancial reparting purposes in the period af sale. The company qualifies to use the instaliment-sales methad far tax purpases. The installment period is 3 years; one-third of thc sale price ts collected in the prod of sale. Thc tax rate was 40% in 2a17, and 35% in 201 H and 2a19. The 35% tax rate was not enacted in law unti 2a1H. Tho accounting and tax data for the years is shown helow. Financial Accounting Tax Return Income before temporary difference Temporary difference Income $89,600 76,800 $166,400 SB9,E00 $115,200 Income berore temporary difference $89,600 $69,600 Incoma $89,600 115,200 $89,6D Income bcfore temporary difference Temporary difference Incorme $39,600 $115,200