Yarman Inc. began business on January 1, 2008. Its pretax financial income for the first 2 years was as follows: 2008 $240,000 2009 560,000 The following items caused the only differences between pretax financial income and taxable income. 1. In 2008, the company collected $180,000 of rent; of this amount, $60,000 was earned in 2008; the other $120,000 will be earned equally over the 2009-2010 period. The full $180,000 was included in taxable income in 2008. 2. The company pays $10,000 a year for life insurance on officers. 3. In 2009, the company terminated a top executive and agreed to $90,000 severance pay. The amount will be paid $30,000 per year for 2009-2011. The 2009 payment was made. The $90,000 was expensed in 2009. For tax purposes, the severance pay is deductible as it is paid. The enacted tax rates existing at December 31, 2007 are: 2008 30% 2010 40% 2009 35% 2011 40% Instructions (a) Determine taxable income for 2008 and 2009. (b) Determine the deferred income taxes at the end of 2008, and prepare the journal entry to record income taxes for 2008. (c) Prepare a schedule of future taxable and (deductible) amounts at the end of 2009. (d) Prepare a schedule of the deferred tax (asset) and liability at the end of 2009. (e) Compute the net deferred tax expense (benefit) for 2009. (f) Prepare the journal entry to record income taxes for 2009. (g) Show how the deferred income taxes should be reported on the balance sheet at December 31, 2009.