Allowance to Reduce Deferred Tax Asset to Expected Realizable Value Benefit Due to Loss Carryback Benefit Due to Loss Carryforward Deferred Tax Asset Deferred Tax Liability Income Tax Expense Income Tax Payable Income Tax Refund Receivable No Entry

Problem 19-4 (Part Level Submission) The accounting records of Flounder Inc. show the following data for 2017 (its first year of operations). 1. Life insurance expense on officers was $8,800 2. Equipment was acquired in early January for $323,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Flounder used a 30% rate to calculate depreciation. 3. Interest revenue on State of New York bonds totaled $3,700 4. Product warranties were estimated to be $48,400 in 2017. Actual repair and labor costs related to the warranties in 2017 were $9,000. The remainder is estimated to be paid evenly in 2018 and 2019 5. Gross profit on an accrual basis was $104,000. For tax purposes, $78,500 was recorded on the installment-sales method 6. Fines incurred for pollution violations were $4,100. 7. Pretax financial income was $785,300. The tax rate is 30%. 7(a Prepare a schedule starting with pretax financial income in 2017 and ending with taxable income in 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45)) Schedule of Pretax Financial Income and Taxable Income for 2017 Pretax financial income Permanent differences Temporary differences Taxable income