Nash Company began operations at the beginning of 2021. The following information pertains to this company. 1. 2. 3. Pretax financial income for 2021 is $85,000. The tax rate enacted for 2021 and future years is 20%. Differences between the 2021 income statement and tax return are listed below: (a) Warranty expense accrued for financial reporting purposes amounts to $6,900. Warranty deductions per the tax return amount to $2,100. (b) Gross profit on construction contracts using the percentage-of-completion method per books amounts to $90,200. Gross profit on construction contracts for tax purposes amounts to $73,000. (c) Depreciation of property, plant, and equipment for financial reporting purposes amounts to $64,300. Depreciation of these assets amounts to $76,900 for the tax return. (d) A $3,300 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,400. Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) 4. (a) x Your answer is incorrect. Compute taxable income for 2021. Taxable income for 2021 $ 7240