Black Kitty Company recorded certain revenues of $10,000 and $20,000 on its books in 2001 and 2002, respectively. However, these revenues were not subject to income taxation until 2003. Company records reveal pretax financial accounting income and taxable income for the threeyear period as follows: Financial Income Taxable Income (i ere tr ee a Pe acces. ve fei ler er a OEE RRO oe $44,000 $34,000 2D. () Dis aerate: Ge Ree crete a Sythe. Rel he A ek 28 eae 38,000 18,000 ZOOS ercre i wae scyorek ehitdira, whe we: ie MORONS. ARs oe OR a 21,000 51,000 Assume Black Kitty’s tax rate is 40% for all periods. Required: 1. Determine the amount of income tax that will be paid each year from 2001 through 2003. 2. Determine the amount of income tax expense that will be reported on the income statement each year from 2001 through 2003. 3. Compute the amount of deferred tax liability that would be reported on the balance sheet at the end of each year. 4. Interpretive Question: Why would the IRS allow Black Kitty to defer payment of taxes on some of the revenue earned in 2001 and 2002?