The information below was disclosed during the audit of Elbert Inc. Year Amount Due per Tax Return 2012 $138,200 2013 107,100 2. On January 1, 2012, equipment costing $637,600 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.) 3. In January 2013, $238,800 is collected in advance rental of a building for a 3-year period. The entire $238,800 is reported as taxable income in 2013, but $159,200 of the $238,800 is reported as unearned revenue in 2013 for financial reporting purposes. The remaining amount of unearned revenue is to be earned equally in 2014 and 2015. 4. The tax rate is 40% in 2012 and all subsequent periods. (Hint: To find taxable income in 2012 and 2013, the related income taxes payable amounts will have to be grossed up.) 5. No temporary differences existed at the end of 2011. Elbert expects to report taxable income in each of the next 5 years. (a)Determine the amount to report for deferred income taxes at the end of 2012, and indicate how it should be classified on the balance sheet. (b)Prepare the journal entry to record income taxes for 2012 (c)Draft the income tax section of the income statement for 2012, beginning with Income before income taxes. (You must compute taxable income and then combine that with changes in cumulative temporary differences to arrive at pretax financial income.) (d)Determine the deferred income taxes at the end of 2013, and indicate how they should be classified on the balance sheet. (e)Prepare the journal entry to record income taxes for 2013. (f)Draft the income tax section of the income statement for 2013, beginning with Income before income taxes