Whispering Winds Corporation purchased equipment very late in 2020. Based on generous capital cost allowance rates provided in the Income Tax Act, Whispering Winds Corporation claimed CCA on its 2020 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $35,100 in 2021, $36,300 in 2022, and $44,300 in 2023. Whispering Windss accounting income for 2020 is $249,400 and $209,400 in each of 2021 and 2022, and the tax rate is 30% for all years. There are no deferred tax accounts at the beginning of 2020.

Calculate the deferred tax balances at December 31, 2021 and 2022.

		2021		2022
Deferred tax liabilityasset		$		$

Calculate taxable income and income tax payable for 2021 and 2022.

		2021		2022
Taxable income		$		$
Income tax payable		$		$

Prepare the journal entries to record income taxes for 2021 and 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Year	Account Titles and Explanation	Debit	Credit
2021
	(To record current tax expense)
	(To record deferred tax benefit)
2022
	(To record current tax expense)
	(To record deferred tax benefit)

Prepare the income tax expense section of the income statement for 2021, beginning with the line Income before income tax.

Whispering Winds Corporation (Partial) Income Statement For the Month Ended December 31, 2021For the Year Ended December 31, 2021December 31, 2021
Deferred Tax AssetCurrent Income Tax BenefitIncome Before Income TaxIncome Tax Expense - Deferred (Benefit)Income Tax Expense - CurrentNet Income / (Loss)Deferred Tax Liability				$
Deferred Tax AssetCurrent Income Tax BenefitIncome Tax Expense - CurrentNet Income / (Loss)Deferred Tax LiabilityIncome Before Income TaxIncome Tax Expense - Deferred (Benefit)		$
Income Tax Expense - Deferred (Benefit)Income Before Income TaxDeferred Tax LiabilityCurrent Income Tax BenefitNet Income / (Loss)Income Tax Expense - CurrentDeferred Tax Asset
Net Income / (Loss)Income Tax Expense - CurrentCurrent Income Tax BenefitDeferred Tax AssetDeferred Tax LiabilityIncome Tax Expense - Deferred (Benefit)Income Before Income Tax				$

Prepare the income tax expense section of the income statement for 2022, beginning with the line Income before income tax.

Whispering Winds Corporation (Partial) Income Statement December 31, 2022For the Year Ended December 31, 2022For the Month Ended December 31, 2022
Income Tax Expense - CurrentIncome Before Income TaxDeferred Tax LiabilityDeferred Tax AssetIncome Tax Expense - Deferred (Benefit)Net Income / (Loss)Current Income Tax Benefit				$
Net Income / (Loss)Deferred Tax LiabilityIncome Tax Expense - Deferred (Benefit)Income Tax Expense - CurrentIncome Before Income TaxCurrent Income Tax BenefitDeferred Tax Asset		$
Current Income Tax BenefitDeferred Tax LiabilityDeferred Tax AssetIncome Tax Expense - Deferred (Benefit)Net Income / (Loss)Income Before Income TaxIncome Tax Expense - Current
Income Tax Expense - CurrentIncome Tax Expense - Deferred (Benefit)Net Income / (Loss)Deferred Tax LiabilityDeferred Tax AssetCurrent Income Tax BenefitIncome Before Income Tax				$

What trend do you notice in the amount of net income reported for 2021 and 2022 in part (d)?

The net income is higherunchangedlower in 2022.

Is this a coincidence?

This trend in net income is a coincidenceis not a coincidence.