The income statement for Prince Inc. for two years (summarized) follow. GAAP Tax 2020 2021 2020 2021 Service revenue $0 $6,000 $6,000 $0 Sales revenue 108,000 114,000 108,000 114,000 Environmental fines (6,000) (6,000) 0 Warranty expense (4,800) 0 0 (4,800) Other expenses (80,400) (102,600) (80,400) (102,600) Pretax GAAP income $16,800 $11,400 Taxable income $33,600 $6,600 Additional information Environment fines are not deductible for income tax purposes. The amount collected in 2020 related to deferred service revenue ($6,000) was taxable in 2020. Accrued warranty costs of $4,800 are not deductible for income tax purposes until 2021 when the expenditures are made. Income tax rate is 25% for both years. At the beginning of 2020, deferred tax asset and liability balances were zero. e. Show how the tax accounts (excluding income taxes payable) would be reported on the income statement and balance sheet for 2020 and 2021. Include the disclosure of current and deferred tax expense. Note: Do not use negative signs with your answers. Note: If the balance is zero for an account, leave the amount blank (or enter a zero). Partial Income Statement For the year ended December 31, 2020 Income before income taxes Income tax expense . Net income $ 16,800 5,700 11,100 $ $ Financial Statement Disclosure Current tax expense Deferred tax benefit Total income tax expense Balance Sheet, Dec. 31 Noncurrent assets Deferred tax asset, net 2020 80,400 x 2,700 6 * $ 2020 $ 2,700 Partial Income Statement For the year ended December 31, 2021 Income before income taxes Income tax expense $ 11,400 4,350 7,050 Net income $ $ Financial Statement Disclosure Current tax expense Deferred tax expense Total income tax expense 2020 80,400 x 5,700 x 6 x $ Balance Sheet, Dec. 31 2020 Noncurrent assets Deferred tax asset, net v$ 6,000 x f. Compute the effective tax rate for 2020. Note: Round percentage to the nearest whole p Effective tax rate 21 % The income statement for Prince Inc. for two years (summarized) follow. GAAP Tax 2020 2021 2020 2021 Service revenue $0 $6,000 $6,000 $0 Sales revenue 108,000 114,000 108,000 114,000 Environmental fines (6,000) (6,000) 0 Warranty expense (4,800) 0 0 (4,800) Other expenses (80,400) (102,600) (80,400) (102,600) Pretax GAAP income $16,800 $11,400 Taxable income $33,600 $6,600 Additional information Environment fines are not deductible for income tax purposes. The amount collected in 2020 related to deferred service revenue ($6,000) was taxable in 2020. Accrued warranty costs of $4,800 are not deductible for income tax purposes until 2021 when the expenditures are made. Income tax rate is 25% for both years. At the beginning of 2020, deferred tax asset and liability balances were zero. e. Show how the tax accounts (excluding income taxes payable) would be reported on the income statement and balance sheet for 2020 and 2021. Include the disclosure of current and deferred tax expense. Note: Do not use negative signs with your answers. Note: If the balance is zero for an account, leave the amount blank (or enter a zero). Partial Income Statement For the year ended December 31, 2020 Income before income taxes Income tax expense . Net income $ 16,800 5,700 11,100 $ $ Financial Statement Disclosure Current tax expense Deferred tax benefit Total income tax expense Balance Sheet, Dec. 31 Noncurrent assets Deferred tax asset, net 2020 80,400 x 2,700 6 * $ 2020 $ 2,700 Partial Income Statement For the year ended December 31, 2021 Income before income taxes Income tax expense $ 11,400 4,350 7,050 Net income $ $ Financial Statement Disclosure Current tax expense Deferred tax expense Total income tax expense 2020 80,400 x 5,700 x 6 x $ Balance Sheet, Dec. 31 2020 Noncurrent assets Deferred tax asset, net v$ 6,000 x f. Compute the effective tax rate for 2020. Note: Round percentage to the nearest whole p Effective tax rate 21 %