Please see the attachment
1. At December 31, 2021, Vermont Industries reported three temporary differences between accounting and taxable income. Vermont had $25,000 of future deductible amounts resulting from accrued warranty liabilities. Vermont offers customers a one year warranty on its products. Vermont had $55,000 in future taxable amounts associated with depreciation on property and equipment, and $15,000 in future taxable amounts associated with prepaid expenses that expire in 2022. No temporary differences existed at December 31, 2020. The income tax rate is 40%. Vermont would report the following amount(s) related to deferred taxes on its year end December 31, 2021 balance sheet: A) $18,000 net noncurrent deferred tax liability. B) $4,000 current deferred tax asset and $22,000 noncurrent deferred tax liability. C) $10,000 noncurrent deferred tax asset and $28,000 noncurrent deferred tax liability. D) $4,000 noncurrent deferred tax asset and $22,000 noncurrent deferred tax liability. 2. Maine Company reported a pretax operating loss of $150,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 40% for 2021 and subsequent years. In 2019, Maine reported taxable income of $42,000 and paid $14,700 in income taxes; and in 2020 Maine reported taxable income of $40,000 and paid $16,000 in taxes. Assume Maine Company manufactures and sells automotive parts. In addition, Maine expects to generate positive operating profits and taxable income in the future. The after tax net loss reported by Maine on its year end December 31, 2021 income statement is: A) $119,300 B) $150,000 C) $90,000 D) $92,100 3. Ohio Corp. reported a deferred tax liability of $6,000,000 for the year ended December 31, 2020, when the tax rate was 40%. The deferred tax liability was related to a temporary difference of $15,000,000 caused by an installment sale in 2020. The temporary difference is expected to reverse in years 2021 through 2023 as $5,000,000 of installment income is expected to be recognized as taxable income in each of those years. There are no other temporary differences. A new tax law was passed in 2021 with the tax rate remaining 40% through December 31, 2021, then increase to 45% for tax years beginning after December 31, 2021. Taxable income for the year 2021 is $30,000,000. Income tax expense reported by Ohio on its year end December 31, 2021 income statement is: A) $12,000,000 B) $10,500,000 C) $10,000,000 D) $11,250,000 Use the following to answer questions 4 and 5: Montana Inc. sells computer systems. Montana leases computers to Utah Company on June 30, 2021. The computers cost Montana $12 million to manufacture. The lease is non-cancelable and has the following terms: ● Lease payments: $2,466,754 semiannually; first payment due June 30, 2021; remaining payments due December 31 and June 30 each year through December 31, 2025. ● Lease term: 5 years (10 semi-annual payments). ● No residual value; no bargain purchase option. ● Economic life of equipment: 5 years. ● Implicit interest rate and lessee's incremental borrowing rate: 10% per year. ● Fair value of the computers at June 30, 2021: $20 million. Collectability of the rental payments is reasonably assured, and there are no lessor costs yet to be incurred. 4. Montana would account for this lease as: A) A finance lease. B) A sales type lease without selling profit. C) A sales type lease with selling profit. D) An operating lease. 5. The lease payable balance on Utah's books after the December 31, 2021 payment is closest to: A) $15,943,154 B) $17,533,246 C) $21,000,000 D) $15,066,492 6. New Mexico Corporation leased equipment under an agreement that qualifies as a finance lease. The present value of the minimum lease payments is $120,000. The lease term is five years. After the expiration of the five year lease, the lease contains a bargain