Sveet Syrups, Ltd., [SSL), a maple syrup manufacturer, was incorporated in 2017 but began its business operations only on January 1, 2018. During its first year, 2017, it purchased specialized equipment costing $5,500,000 on which it was allowed in the same year, an initial depreciation of $1,100,000. Although SSL did not generate any revenues nor incur any expenses during its first year, it claimed the permissible depreciation for 2017. The equipment, with a useful life of 5 years, was depreciated on a straight-line basis beginning 2018 for financial reporting purposes. It reported the following events causing differences between pretax accounting income and taxable income during 2018: SSL using an accelerated method for tax purposes, will depreciate $2,000,000 in 2018 and in each of the following three years, 2019-21, it will depreciate $800,000 per year. * On December 31, 2018, SSL collected $700,000 for future delivery of 35,000 cases of its Gold Light Syrup. It is scheduled to deliver 21,000 cases in 2019 and the remainder in 2020. SSL invests in agricultural bonds issued by the government which provides tax-free returns. In 2018, the company reported $80,000 of investment income from these bonds on its income statement. * SSL produces a premium brand of syrup and advertised it as as SunShine Syrup - Foods For The Gods. In a promotion campaign, it provides a warranty to all buyers of SunShine Syrup with a promise, We will give you a full refund if you are hospitalized after eating our syrup on your pancakes. Based on industry-wide experience, the company estimates that this warranty will cost 10% of sales. Sales of the SunShine brand syrup in 2018 amounted to $1,000,000 and the firm recorded an accrued warranty expense of $100,000. These warranties expire in two years. On December 31, 2018, the company reported a balance of $93,000 in the Estimated Liability for Product Warranties. * In 2018, it decided to rent some land on which the maple trees grew, to neighboring cattle ranchers who used this land to graze their cattle. It received rent in advance for four years 2018 - 2021. Each year, an equal amount was to be recognized by the company as rent revenues. It reported $111,000 as Uneamed Rent for the remaining three years on its balance sheet as at December 31, 2018. * Further in the same year, it sold off an excess piece of land for an amount of $300,000, thereby generating a profit of $120,000 which was duly recognized in 2018. Cash was received from a 30% down payment with the balance being 40% receivable in 2019 and 30% in 2020. * In 2018, SSL insured the life of its founding president, Mr. Honni Bii. The premiums paid amounted to $50,000. The company is the beneficiary of the insurance policy. The company operates with a 40% tax rate and reported income before tax of $5,000,000 under ASPE for 2018 REQUIRED: 1. Determine the income tax payable in 2018 and record it with an appropriate journal entry. Be sure to show your computations in detail and in a well organized schedule. 2. Determine the balance in the deferred tax asset and liability account as at December 31, 2018. Show your computations in a well organized schedule. Also, prepare any journal entry/entries required for this purpose. 3. Show clearly how the Deferred Tax Asset or Liability will be reported on the Balance Sheet as at December 31, 2018. Show clearly the details of your work. 4. Prepare an Income Statement (Part Only) beginning with Income Before Taxes for 2018. Sveet Syrups, Ltd., [SSL), a maple syrup manufacturer, was incorporated in 2017 but began its business operations only on January 1, 2018. During its first year, 2017, it purchased specialized equipment costing $5,500,000 on which it was allowed in the same year, an initial depreciation of $1,100,000. Although SSL did not generate any revenues nor incur any expenses during its first year, it claimed the permissible depreciation for 2017. The equipment, with a useful life of 5 years, was depreciated on a straight-line basis beginning 2018 for financial reporting purposes. It reported the following events causing differences between pretax accounting income and taxable income during 2018: SSL using an accelerated method for tax purposes, will depreciate $2,000,000 in 2018 and in each of the following three years, 2019-21, it will depreciate $800,000 per year. * On December 31, 2018, SSL collected $700,000 for future delivery of 35,000 cases of its Gold Light Syrup. It is scheduled to deliver 21,000 cases in 2019 and the remainder in 2020. SSL invests in agricultural bonds issued by the government which provides tax-free returns. In 2018, the company reported $80,000 of investment income from these bonds on its income statement. * SSL produces a premium brand of syrup and advertised it as as SunShine Syrup - Foods For The Gods. In a promotion campaign, it provides a warranty to all buyers of SunShine Syrup with a promise, We will give you a full refund if you are hospitalized after eating our syrup on your pancakes. Based on industry-wide experience, the company estimates that this warranty will cost 10% of sales. Sales of the SunShine brand syrup in 2018 amounted to $1,000,000 and the firm recorded an accrued warranty expense of $100,000. These warranties expire in two years. On December 31, 2018, the company reported a balance of $93,000 in the Estimated Liability for Product Warranties. * In 2018, it decided to rent some land on which the maple trees grew, to neighboring cattle ranchers who used this land to graze their cattle. It received rent in advance for four years 2018 - 2021. Each year, an equal amount was to be recognized by the company as rent revenues. It reported $111,000 as Uneamed Rent for the remaining three years on its balance sheet as at December 31, 2018. * Further in the same year, it sold off an excess piece of land for an amount of $300,000, thereby generating a profit of $120,000 which was duly recognized in 2018. Cash was received from a 30% down payment with the balance being 40% receivable in 2019 and 30% in 2020. * In 2018, SSL insured the life of its founding president, Mr. Honni Bii. The premiums paid amounted to $50,000. The company is the beneficiary of the insurance policy. The company operates with a 40% tax rate and reported income before tax of $5,000,000 under ASPE for 2018 REQUIRED: 1. Determine the income tax payable in 2018 and record it with an appropriate journal entry. Be sure to show your computations in detail and in a well organized schedule. 2. Determine the balance in the deferred tax asset and liability account as at December 31, 2018. Show your computations in a well organized schedule. Also, prepare any journal entry/entries required for this purpose. 3. Show clearly how the Deferred Tax Asset or Liability will be reported on the Balance Sheet as at December 31, 2018. Show clearly the details of your work. 4. Prepare an Income Statement (Part Only) beginning with Income Before Taxes for 2018