Here is the problem with the answer. I just need a short analysis of what the numbers below mean and how they relate to the "business". A few sentences up to a paragraph would be amazing.

Johnny Bravo Company began operations in 2016 and has provided the following information. Pretax financial income for 2016 is $100,000. The tax rate enacted for 2016 and future years is 40%. Differences between the 2016 income statement and tax return are listed below: Warranty expense accrued for financial reporting purposes amounts to $5,000. Warranty deductions per the tax return amount to $2,000. Gross profit on construction contracts using the percentage-of-completion method for book purposes amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $62,000. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000. Depreciation of these assets amounts to $80,000 for the tax return. A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. Interest revenue earned on an investment in tax-exempt municipal bonds amounts to $1,400. Taxable income is expected for the next few years.

$100,000 Pretax financial income Permanent differences (a) Fine for pollution Tax-exempt interest 3,500 (1,400) Originating temporary differences Excess warranty expense per books 3,000 ($5,000 - $2,000) ($92,000 $62,000) ($80,000 $60,000) Excess construction profits per books (30,000) Excess depreciation per tax (20,000) Taxable income S55,100