The following information is available for the first 4 years of operations for Celestial Corporation: E: (Click the icon to view the information.) On January 2, 2019, the firm collected $132,000 in advance for rental of a building for a 3-year period. The firm reported the entire $132,000 as taxable income in 2019, but $88,000 of the advance collection was unearned at December 31, 2019. The $88,000 was earned evenly over the next 2 years (i.e., 2020 and 2021). Read the requirements. On January 2, 2018, the firm acquired heavy equipment costing $170,000 in a cash transaction. The equipment had a useful life of 5 years and no scrap value. The firm used the straight-line method of depreciation for book purposes; see the following for the tax depreciation taken each year: B (Click the icon to view the tax depreciation.) Year Taxable Income (incorporates all information presented) $ 170,000 Enacted Tax Rate (%) 2018 30 % 2019 136,000 30 2020 99,000 30 2021 170,000 30 Tax Depreciation 2018 2019 2020 2021 Total $ $ 56,100 $ 76,500 $ 25,500 $ 11,900 $ 170,000 a. Determine the balance of the deferred tax accounts at the end of 2021. b. Repeat requirement (a) assuming that a newly enacted tax law increased the corporate tax rate to 33%, effective the beginning of 2019. C. Prepare the journal entries for 2018 and 2019 in requirement (b). d. Prepare the journal entries for 2019 and 2020 in requirement (b) assuming that based on all available evidence, it is more likely than not that half of the deferred tax asset will not be realized. Reverse out the allowance for the realized portion of the deferred tax asset in 2020. Requirement a. Determine the balance of the deferred tax accounts at the end of 2021. (Enter a "0" for any zero balances. Use a minus sign or parentheses for amounts that represent a future taxable amount and a deferred tax liability.) Future Deductible Deferred Tax Temporary Difference Book Basis Tax Basis (Taxable) Amount Tax Rate Asset (Liability) % % Requirement b. Repeat requirement (a) assuming that a newly enacted tax law increased the corporate tax rate to 33%, effective the beginning of 2019. (Enter a "0" for any zero balances. Use a minus sign or parentheses for amounts that represent a future taxable amount and a deferred tax liability.) Future Deductible Deferred Tax Temporary Difference Book Basis Tax Basis (Taxable) Amount Tax Rate Asset (Liability) % % Requirement b. Repeat requirement (a) assuming that a newly enacted tax law increased the corporate tax rate to 33%, effective the beginning of 2019. (Enter a "0" for any zero balances. Use a minus sign or parentheses for amounts that represent a future taxable amount and a deferred tax liability.) Future Deductible Deferred Tax Temporary Difference Book Basis Tax Basis (Taxable) Amount Tax Rate Asset (Liability) % % Requirement c. Prepare the journal entries for 2018 and 2019 in requirement (b). First, compute the income tax expense amounts for 2018 and 2019. (Enter a "0" for any zero balances. Use a minus sign or parentheses for numbers to be subtracted.) Computation of Income Tax Expense 2018 2019 Now, prepare the journal entry for 2018. (Record debits first, then credits. Exclude explanations from any journal entries.) Account 2018 Prepare the journal entries for 2019. Begin with the journal entry to reflect the change in the deferred balance as a result of the tax rate change in 2019. Account 2019 - Beg. of year Prepare the tax provision for 2019. (Record a compound journal entry.) Account 2019 Requirement d. Prepare the journal entries for 2019 and 2020 in requirement (b) assuming that based on all available evidence, it is more likely than not that half of the deferred tax asset will not be realized. Reverse out the allowance for the realized portion of the deferred tax asset in 2020. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin with the journal entry to reflect the change in the deferred balance as a result of the tax rate change in 2019. Account 2019 - Beg. of year Begin with the journal entry to reflect the change in the deferred balance as a result of the tax rate change in 2019. Account 2019 - Beg. of year Prepare the journal entry to record the tax provision for 2019. (Record a compound journal entry.) Account 2019 Prepare the journal entry to record the tax provision for 2020. (Record a compound journal entry.) Account 2020 Finally, reverse out the allowance for the realized portion of the deferred tax asset in 2020. Account 2020