1. Prior to 2017, taxable income and pretax financial inomce were identical

2.Pretax financial income is $1,700,000 in 2017 and $1,400,000 in 2018

3. On January 1, 2017, equipment costing $1,200,000 is purchased. It is to be depreciated on a straight-line method basis over 5 years for tax purposes and over 8 years for financial reporting purposes.

4. Interest of $60,000 was earned on tax-exempt municipal obligations in 2018.

5. Included in 2018 pretax financial income is a gain on discontinued oper.ations of $200,000, wihich is fully taxable.

6. the tax rate is 35% for all periods

7. Taxable income is expected in all future years

A. Compute taxable icome and income taxes payable for 2018

B. Prepare the journal entry to record 2018 income expense, income taxes payable, and deferred taxes.

C. Prepare the bottom protion of Gocker's 2018 income tax statement, beginnng with "Income from continuting operations before income taxes.

D. Indicate how deferred income taxes ahould be presented on the December 31, 2018 balance sheet