Temporary revenue and expense timing differences between income before income taxes and taxable income for Broadway Suites Inc.’s first four years of operations ended December 31 are as follows:

Assume that the income tax rate for each year is 25% and that all tax payments are made when due.
a. Fill in the amounts in the following table for each year:

b. Over the life of a corporation, will the total tax expense on the income statements equal the total tax paid on the tax returns? Explain.
c. At any point in the life of a corporation, will there normally be a balance in Deferred Income Tax Payable? If so, will the balance normally be a credit or debit balance? Explain.

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20Υ1 20Y2 20Y3 20Y4 Income before taxes $5,000,000 $6,500,000 $7,200,000 $8,300,000 Taxable income 4,500,000 5,100,000 8,300,000 9,100,000