7.Looking for solution for problem 19-3 for chapter 19 Intermediate Accounting ( kieso Weygandt warfield ). Thanks.

(Second year of Depreciation difference, two differences, single rate, discontinued operation) The following informationhas been obtained from Gocker Corp.

1. Prior to 2017, taxable income and pretax financial income 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 basis over 4 years for tax purposes and over 10 years for financial reporting purposes. ( Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A)

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 operations of $200,000, which is fully taxable.

6. The tax rate is 35% for all periods.

7. Taxable income is expected in all future years.

Instructions:

a) Compute taxable income and income taxes payable for 2018

b) Prepare the journal entry to record 2018 income tax expense, income taxes payable, and deferred taxes.

c) Prepare the bottom protion of Gockers 2018 income statement, beginning with "Income from continuing operations before income taxes"

d) Indicate how deferred income taxes shoud be presented on the December 31, 2018, balance sheet.