Please answer c and d. I have the first two parts completed. thanks!

Case 12-7 Accounting for Income Taxes: Different Approaches Mark or Make is a bourbon distillery. Sales have been steady i. No allocation for the past three years, and operating costs have remained ii. Comprehensive allocation unchanged. On January 1, 2019, Mark or Make took advantage of a special deal to prepay its rent for three years at a substan. b. Do you believe that no allocation distorts Mark or Make's net income? Explain. tial savings. The amount of the prepayment was $60,000. The income statement items (excluding the rent) are shown here, For years 2019 and 2020, Mark or Make reported net income applying the concept of comprehensive interperiod income tax allocation. During 2020, Congress passed a new tax law 2019 2020 2021 that will increase the corporate tax rate from 30 to 33%. Gross profit on sales 350,000 349,000 351,000 Reconstruct the income statements for 2020 and 2019 under Operating expense 210,000 210,000 210,000 the following assumptions: i Mark or Make uses the deferred method to account for Assume that the rental is deducted on the corporate tax interperiod income tax allocation, purposes in 2019 and that there are no other temporary differ- ii. Mark or Make uses the asset-liability approach to ences between taxable income and pretax accounting income account for interperiod income tax allocation. In addition, there are no permanent differences between tax- d. Which of the two approaches used in question (a) provides able income and pretax accounting income. The corporate tax measures of income and liabilities that are useful to decision rate for all three years is 30%. makers? Explain Required: a. Construct income statements for 2019, 2020, and 2021 under the following approaches to interperiod income tax allocation