ecording and Reporting Temporary Difference

Staples Corporation would have had identical pretax income on both its income tax returns and its income statements for Year $1$ through Year $4$ except for a depreciable asset that cost $$360,000.$ The asset was depreciated for income tax purposes at the following amounts: Year $1,$ $$144,000$; Year $2,$ $$108,000$; Year $3,$ $$72,000$; and Year $4,$ $$36,000.$ However, for accounting purposes the straight$-$line method was used, resulting in $$90,000$ per year. The accounting and tax periods both end December $31.$ There were no deferred taxes at the beginning of Year $1.$ The depreciable asset has a four$-$year estimated life and no residual value. The tax rate for each year was $25\%.$ Pretax GAAP income for each of the four years follows.

Year Pretax GAAP Income

Year $1$ $$690,000$

Year $2750,000$

Year $3720,000$

Year $4720,000$

Required

Schedules

Journal Entries

Financial Statement Presentation

c$.$ Record the income tax journal entry on December $31$ of Year $1,$ Year $2,$ Year $3,$ and Year $4.$

Date Account Name Dr$.$ Cr$.$

Dec. $31,$ Year $1$

$0$

$0$

Answer

$0$

$0$

Answer

$0$

$0$

Answer

To record income tax expense

Dec. $31,$ Year $2$

$0$

$0$

Answer

$0$

$0$

Answer

$0$

$0$

Answer

To record income tax expense

Dec. $31,$ Year $3$

$0$

$0$

Answer

$0$

$0$

Answer

$0$

$0$

Answer

To record income tax expense

Dec. $31,$ Year $4$

$0$

$0$

Answer

$0$

$0$

Answer

$0$

$0$

Answer

To record income tax expense