Answer:
The answer is given below;
Explanation:
Income Tax Payable =1,800,000*30%=$540,000
Deferred Tax Asset=3,000,000*30%=$900,000
Deferred Tax liability=2,400,000*30%=$720,000
Therefore the income tax expense=$540,000+$720,000-$900,000=$360,000
The litigation expense will be deductible from taxable income when paid,therefore it will give deferred tax asset.
Profit on installment sales will give rise to more profits being subjected to taxes,therefore it gives rise to deferred tax liability.
