In $2024,$ its first year of operations, Cunningham Company reports $$75,000$ of income before taxes. Cunningham computes its taxable income after

considering the following issues:

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

with the $2-$year warranty will be about $$22,000.$ In $2024,$ Cunningham incurs $$11,000$ of costs for warranty claims.

Finding itself with surplus cash, Cunningham invests $$100,000$ in tax$-$free municipal bonds and earns $$8,000$ interest in $2024.$

Cunningham collected $$40,000$ in November $2024$ from a business that wants to rent an unused portion of its warehouse

the rental for the two years $2025-2026,$ and therefore no rental revenue has been recognized for $2024.$ However, Cunningham must pay taxes

on the entire amount collected in $2024.$

An accelerated depreciation method is used for tax purposes. In $2024,$ Cunningham reports $$20,000$ 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 $2024$ is $21\%.$

Required:

a$.$ Calculate taxable income for $2024.$

b$.$ Prepare the journal entry necessary to record income taxes at the end of $2024.$

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