1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $110,000. This difference will reverse in equal amounts of $27,500 over the years 20182021.

2. Interest received on municipal bonds was $10,100.

3. Rent collected in advance on January 1, 2017, totaled $63,000 for a 3-year period. Of this amount, $42,000 was reported as unearned at December 31, 2017, for book purposes.

4. The tax rates are 40% for 2017 and 35% for 2018 and subsequent years.

5. Income taxes of $309,000 are due per the tax return for 2017.

6. No deferred taxes existed at the beginning of 2017.

Compute taxable income for 2017.

Taxable income for 2017 $

Compute pretax financial income for 2017.

Pretax financial income for 2017 $

Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2017 and 2018. Assume taxable income was $1,006,000 in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date Account Titles and Explanation ................................Debit.............. Credit

2017 Income tax Expense

.........Deferred Tax Asset

.......................Income Tax Payable

.......................Deferred Tax Liability

2018 Income Tax Expense

.........Deferred Tax Liability

.........................Deferred Tax Asset

..........................Income Tax Payable

Prepare the income tax expense section of the income statement for 2017, beginning with Income before income taxes. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Concord Corporation Income Statement (Partial)

For The Yearr Ended December 31, 2017

Income Before Income Taxes

Income Tax Expense

.................Current

..................Deferred

Net Income / (Loss) $ $ $