In 2020, Wicked reports $462,000 of income before taxes. Differences when transferring to the tax return include $18,150 of municipal bond interest and $4,200 of life insurance premiums on the CEO. At the end of 2020, Wicked estimated its allowance for bad debts to be 2.5% of its accounts receivable of $905,000. Wicked had write offs of $27,130 during 2020 for the tax return. At the end of 2020, Wicked received 26,500 in rent for 2021 (the rent received last year was earned and is part of the income before taxes). Wicked did not purchase any additional assets during 2020.

Required:

1. Calculate taxable income
2. Give journal entries needed to record taxes
3. Classify deferred taxes as current or long term
4. Show calculation of net income
5. Show reconciliation of statutory rate and effective tax rate