20) Broncos Co. reports pretax financial income of $70,000 for 20x1. The following items cause taxable income to be different than pretax financial income: Depreciation on the tax return is greater than depreciation on the income statement by $15,000. Rent collected on the tax return is greater than rent earned on the income statement by $20,000. Interest income from Denver municipal bonds $12,000 Broncos tax rate is 30% for all years and the company expects to report taxable income in all future years.

a) Compute taxable income for 20x1. Show your computation. No credit if not.

b) Prepare the journal entry to record income tax expense, deferred income tax, and income tax payable for 20x1.

c) Compute net income for 20x1.