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ing data Life insurance expense on officer was $5,000. Life insurance expenses are not tax- deductible. Equipment was acquired in early January for $300,000. Straight
ing data Life insurance expense on officer was $5,000. Life insurance expenses are not tax- deductible. Equipment was acquired in early January for $300,000. Straight line depreciation over a 5- year period is used, with no salvage value. For tax purposes, Shinault Inc was permitted to deduct 100% of the cost of the equipment in the year of the purchase. Interest revenue on State of New York municipal bonds totaled $14,000. Product warranties are estimated to be $50,000 in 2017. Actual repair and labor costs related to the warranties in 2017 were $10,000. The remainder of is estimated to be evenly paid in 2018 and 2019. Sales on accrual basis were $100,000. For tax purposes, $75,000 was recorded on the installment-sales method. Fines incurred for pollution violations were $3,000. Pollution fines are not tax-deductible. Pre-tax financial income is $750,000 for 2017. The tax rate is 35%. Instructions a. b. Construct the income taxes section of the Income Statement. C. Prepare the journal entry for 2017 to record income tax payable, income tax expense, and deferred income taxes. Estimate the ETR and Cash ETR
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