Bravery Company reported the following in 2019:

1. Pretax financial income was 500,000.
2. Gross profit on installment sales per book was 260,000.
3. Gross profit for tax purpose from collections of installment receivables was 230,000.
4. Purchased Machinery in January for 300,000. Used Straight-line depreciation over an eight-year life (no residual value) for financial reporting, and double-declining balance depreciation for tax purpose.
5. Received interest on tax-exempt governmental obligations of 8,000.
6. The estimated warranty expense was 12,600. Repair costs under this warranty during 2019 were 10,500. The remainder incur in 2020.
7. The tax rate is 20%.

Instructions

(a) Prepare a schedule starting with pretax financial income and compute taxable income.

(b) Prepare the journal entry to record income taxes for 2019.