Whitney Corporation had pretax income of $500,000 in 2026, the company's first year of operations. In 2026, one temporary difference originated for Whitney. Specifically, Whitney had gross profit from an installment sale to the Kaisier Company of $300,000 for financial reporting (book) purposes in 2026; for income tax purposes the $300,000 of gross profit will be recognized AS THE CASH IS COLLECTED as follows: $100,000 in 2026, $100,000 in 2027 and $100,000 in 2028. Whitney Corporation had pretax income of $600,000 in 2027, the company's second year of operations. In 2027, one temporary difference originated for Whitney. Specifically, Whitney had gross profit from an installment sale to the Tidwell Company of $300,000 for financial reporting (book) purposes in 2027; for income tax purposes the $300,000 of gross profit will be recognized AS THE CASH IS COLLECTED as follows: $100,000 in 2027, $100,000 in 2028 and $100,000 in 2029. The management of Whitney expects pretax book income and taxable income in all years. All temporary differences reversed as expected. The following income tax rates were in effect as of 1-1-2026 and did not change after that time. Year Income Tax Rate