Differences between the accounting methods applied to accounts and financial reports and those used in determining taxable income yielded the following amounts for the first four years of a corporation's operations:

	First Year	Second Year	Third Year	Fourth Year
Income Before Income Taxes	$425,000	$750,000	$900,000	$1,350,000
Taxable Income	350,000	650,000	700,000	1,725,000

The income tax rate for each of the four years was 40% of taxable income, and each year's taxes were promptly paid.

INSTRUCTIONS

1. Determine for each year the amounts described by the following captions, presenting the information in the form indicated:

			Deferred Income Tax Payable	Deferred Income Tax Payable
Year	Income Tax Dedicated on Income Statement	Income Tax Payments for the Year	Year's Addition (Deduction)	Year-End Balance

2. Total the first three amount columns.

3. Illustrate the effects of recording the current and deferred tax liabilities on the accounts and financial statements for the first year.