The Oliver Starshine Group provided the fol-lowing income information from its first three years of operation.

Oliver offers a one- year warranty on its commercial floor polishing system. The company estimates its warranty cost at 10% of itswar-rantycostat10%of sales.
Required
a. Compute the deferred tax expense and the balance of the deferred tax account for each year.
b. Prepare all journal entries required to record Oliver€™s income tax provision for all three years.

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Year 1 №ar2 Year 3 Tax 1,100 $1,100 (600 (600) Tax Tax Account Sales Operating Expenses Estimated Warranty Cost Actual Warranty Repairs Income before Tax Taxable Income Tax Rate Tax Payable GAAP GAAP GAAP $1,250 1,250 $1,420 S1.420 (833) 720) (125) (720) (833) 142 (110) (200) 177) S 390 S 405 $ 445 S 500 S 330 S 410 x40% S 200 40% × 40% S 164 $ 132