The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows:

	20X8			20X9
Revenues	$	298,000		$	362,000
Expenses		197,000			253,000
Pre-tax income	$	101,000		$	109,000

For tax purposes, the following income tax differences existed:

1. Revenues on the 20X9 statement of profit and loss include $53,000 rent, which is taxable in 20X8 but was unearned at the end of 20X8 for accounting purposes.
2. Expenses on the 20X9 statement of profit and loss include political contributions of $20,500, which are not deductible for income tax purposes.
3. Expenses on the 20X8 statement of profit and loss include $22,500 of estimated warranty costs, which are not deductible for income tax purposes until 20X9.

Required: 1. What was the accounting carrying value and tax basis for unearned revenue and the warranty liability at the end of 20X8 and 20X9? (Leave no cells blank - be certain to enter "0" wherever required.)

Year 20X8 20X9

Unearned Rent Warranty Unearned Rent Warranty

Accounting carrying value

Tax basis

2. Compute (a) income tax payable, (b) deferred income tax, and (c) income tax expense for each period. Assume a tax rate of 30%. (Amounts to be deducted should be indicated by a minus sign.)

20X8 20X9

a. Income tax payable

b. Deferred income tax

c.Total income tax expense

3. Give the entry to record income taxes for each period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2x08 and 2x09 4. Complete statements of profit and loss to include income taxes expense.

Statement of Profit and Loss	20X8	20X9
Revenues	$298,000	$362,000
Expenses	197,000	253,000
Earnings before tax	101,000	109,000
Income tax expense
Net earning (Loss)	$101,000	$109,000

5. What amount of deferred income tax will be reported on the statement of financial position at each year-end?

Statement of Financial Position

Non-current asset: 20X8 20X9