Tanner Corporation begins operations in 2018 and reports the following amounts of pretax financial income and taxable income for the years 2018 through 2022. Tanner has only one temporary difference and only one originating or reversing difference occurs in any single year. Tanner is subject to a tax rate of 30% for all the years.

Required:
1. Prepare the income tax journal entry for each year.
2. Next Level What do you notice about the balance in the deferred taxes over the 5 years?

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Pretax Financial Income Taxable Income Year $ 50,000 75,000 90,000 92,000 113,000 $70,000 85,000 90,000 82,000 93,000 2018 2019 2020 2021 2022