The following information was disclosed during the audit of Crane Inc. 1. Year 2020 2021 Amount Due per Tax Return $134,300 101,500 2. 3. On January 1, 2020, equipment costing $599,900 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5- year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.) In January 2021, $231,300 is collected in advance rental of a building for a 3-year period. The entire $231,300 is reported as taxable income in 2021, but $154,200 of the $231,300 is reported as unearned revenue in 2021 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2022 and 2023. The tax rate is 20% in 2020 and all subsequent periods. (Hint: To find taxable income in 2020 and 2021, the related income taxes payable amounts will have to be "grossed up.") No temporary differences existed at the end of 2019. Crane expects to report taxable income in each of the next 5 years. 4. 5. (a) Your answer is correct. Determine the amount to report for deferred income taxes at the end of 2020, and indicate how it should be classified on the balance sheet Amount to report for deferred income taxes $ 11998 Crane Inc. Balance Sheet December 31, 2020 Other Assets Deferred Tax Asset $ $ 11998 e Textbook and Media List of Accounts Assistance Used Attempts: 6 of 15 used -) Your answer is partially correct. Prepare the journal entry to record income taxes for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Debit Credit Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable