In $2023,$ its first year of operations, XYZ Company reports $$103,600$ of income before taxes. XYZ computes its taxable income after

considering the following issues:

$1.$ XYZ sells various products with an assurance product warranty. Based on industry averages, XYZ estimates that costs associated

with the $2-$year warranty will be about $$32,000.$ In $2023,$ XYZ incurs $$14,000$ of costs for warranty claims.

$2.$ Finding itself with surplus cash, XYZ invests $$100,000$ in tax$-$free municipal bonds and earns $$5,000$ interest in $2023.$

$3.$ XYZ collected $$84,000$ in November $2023$ from a business that is going to be able to rent an unused portion of its warehouse. The $$84,000$

covers the rental for the two years $2024-2025,$ and therefore no rental revenue has been recognized for $2023.$ However, XYZ must pay taxes

on the entire amount collected in $2023.$

$4.$ An accelerated depreciation method is used for tax purposes. In $2023,$ XYZ reports $$28,000$ more depreciation expense for tax

purposes than it shows in the accounting records. The excess depreciation is expected to reverse in $2026.$

The enacted tax rate in $2023$ is $21\%.$

Required:

a$.$ Calculate taxable income for $2023.$

b$.$ Prepare the journal entry necessary to record income taxes at the end of $2023.$

c$.$ How would any deferred tax amounts be reported on a classified balance sheet?