The records of Retter Corporation, at the end of 20X4, provided the following data related to income taxes:

a. Golf club dues expense in \(20 \mathrm{X} 4, \$ 16,000\), properly recorded for accounting purposes but not tax deductible at any time.

b. Investment income in \(20 \mathrm{X} 4, \$ 700,000\), properly recorded for accounting purposes but not taxable at any time.

c. Estimated expense for warranty costs, \(\$ 260,000\); accrued for accounting purposes at the end of \(20 \mathrm{X} 4\); to be reported for income tax purposes when paid. There were no warranty costs incurred in \(20 \mathrm{X} 4\).

d. Gain on disposal of land, \(\$ 960,000\); recorded for accounting purposes at the end of \(20 X 4\); to be reported as a capital gain for income tax purposes at the end of 20X6.

Accounting income (from the financial statements) for 20X4, \(\$ 1,600,000\); the income tax rate is \(40 \%\). There were no deferred tax amounts as of the beginning of \(20 \mathrm{X} 4\).

Required:

1. Are the individual differences listed above permanent differences or temporary differences? Explain why.

2. Prepare the journal entry to record income tax at the end of \(20 \mathrm{X} 4\).

3. Show the amounts that will be reported on

(a) the statement of financial position and

(b) the statement of profit and loss for \(20 \mathrm{X} 4\).