2018 Pretax Accounting Income:$600,000

2018 Municipal Bond Interest Income Recognized in Pretax Accounting Income:$10,000

2018 Warranty Expense of $40,000 for Accounting Purposes

2018 Actual Warranty Costs Incurred were $30,000

December 31, 2018 Warranty Liability is $10,000

2018 Installment Sales Included in Pretax Income Totaled $150,000

2018 Installment Sales for Tax Purposes Totaled $100,000

December 31, 2018 Installment Receivable was $50,000 (to be collected equally in 2019/20)

Federal Fines Included Against Pretax Income totaled $20,000

Fixed Assets Purchased Prior to January 1, 2018 were Fully Depreciated at 12/31/17 EXCEPT:

Fixed Assets purchased on January 1, 2017 for $150,000.Estimated Life is 4 Years

Depreciation for Accounting Purposes is Straight Line

Depreciation for Tax Purposes for 4 Year Assets is 50%, 30%, 10%, and 10%

Assume that the current balance in Deferred Tax Assets and Deferred Tax Liabilities PRIOR to the 2018 Closing Entry is Correct.

Federal Tax Rate is 20%

1.What is the taxable income for the year ended December 31, 2018?

2.What is the current/deferred tax journal entry to necessary at December 31, 2018