The following information pertains to Tempo Co., a manufacturer of household appliances, for the year ended December 31, Year 5. The noncurrent liabilities section of Tempo Co.'s December 31, Year 4, balance sheet included a deferred income tax liability of $15,750.

The only difference between Tempo's taxable income and pretax accounting income is depreciation on a machine acquired on January 1, Year 4, for $250,000. The machine's estimated useful life is 5 years, with no salvage value. Depreciation is computed using the straight-line method for financial reporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for Year 5 through Year 8 is presented in the following table.

Year		Tax Depreciation		Financial Depreciation		Tax Depreciation over (under) Financial Depreciation
Year 5		$80,000		$50,000		$30,000
Year 6		40,000		50,000		(10,000)
Year 7		35,000		50,000		(15,000)
Year 8		30,000		50,000		(20,000)

The enacted federal income tax rates are 30% for Year 4 and Year 5, and 35% for Year 6 through Year 8.

Included in Tempo's December Year 4 balance sheet was a deferred tax asset of $9,000.

For the year ended December 31, Year 5, Tempo's income before income taxes was $430,000.

Complete Tempo's balance sheet by calculating Tempo's income before income taxes, current income tax expense, deferred income tax expense, and net income using the information above. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive values. Enter any percentages as decimals.

Tempo Co.
INCOME TAX EXPENSE AND NET INCOME
For the Year Ended December 31, Year 5

Income before income taxes
Income tax expense:
Current
Deferred
Net income
Computation: Deferred income tax expense
Temporary difference
Year 6
Year 7
Year 8
Effective tax rate for years Year 6 through Year 8
Deferred tax liability, 12/31/Year 5
12/31/Year 4 deferred tax asset
12/31/Year 4 deferred tax liability
Year 5 deferred income tax expense