The Tanner Corporation begins operations in 2009 and reports the following amounts of pretax financial income and taxable income for the years 2009 through 2013. The company has only one temporary difference, and only one originating or reversing difference occurs in any single year. The company is subject to a tax rate of 30% for all the years.

Required
1. Prepare the income tax journal entry for each year.
2. What do you notice about the balance in the deferred taxes over the fiveyears?

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Year 2009 2010 2011 2012 2013 Pretax Financial Income 70,000 85,000 90,000 82,000 93,000 Taxable Income s 50,000 75,000 90,000 92,000 113,000