lue Inc. (BBI) listed the following items to prepare a reconciliation between book and taxable income. GAAP net income before tax $ 700,000 Entertainment expense 100,000 GAAP depreciation expense  90,000 Depreciation expense for tax purposes 120,000 a. Compute BBI's tax expense for financial statement purposes. b. Compute BBI's tax payable to the IRS. c. Compute the net increase in BBI's deferred tax assets or deferred tax liabilities for the year. d. Record the journal entry to record taxes for the year.

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Deferred Tax

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