Points$)$ The records for Wenger Co$.$ show this data for $2025$:

o Interest received on tax$-$exempt Tennessee State bonds was $$10,000.$ P

o Gross profit on installment sales recorded on the books was $$495,000.$ Gross profit from collections of installment receivables was $$325,000.$

$495-305$:$170$

$)$ Stock based compensation expense for the year was $$12,000.$

The estimated warranty liability related to $2025$ sales was $$25,000.$ Repair costs under $=13,000$

warranties during $2025$ were $$12,000.$ The remainder will be incurred in $2026.$

o Machinery was acquired in January for $$350,000.$ Straight$-$line depreciation over a $14$ year life $($no salvage value$)$ is used. For tax purposes, MACRS depreciation is used, and Bosch can deduct $10\%$ for $2025.$

o Pretax financial income is $$800,000.$ The tax rate is $20\%.$

Instructions $($a$)$

Prepare a schedule starting with pretax financial income and compute taxable income.

$($b$)$

Prepare the journal entry to record income taxes for $2025.$