During 2008, Kate Holmes Co.'s first year of operations, the company reports pretax financial income at $250,000. Holmes's enacted tax rate is 45% for 2008 and 40% for all later years. Holmes expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2008, are summarized on the following page.

Instructions
(a) Complete the schedule below to compute deferred taxes at December 31, 2008.
(b) Compute taxable income for 2008.
(c) Prepare the journal entry to record income tax payable, deferred taxes, and income tax expense for2008.

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Deductible)Taxmber 31 2008 Rate Asset Liability Future Taxable Deferred Tax Difference Amounts Installment sales Depreciation Uneaned rent $96,000 30,000 (100,000) Totals