Prepare the bottom of the income statement for Arsenal just for 2018, beginning with Income before Income Taxes you do not need to separate income tax expense or benefit into current and non-current portions.

Arsenal, Inc. began 2018 with the following balances in deferred tax accounts: The deferred tax asset results from a balance of $500,000 in Warranty Liability. The deferred tax liability results from the financial accounting bases of depreciable assets exceeding the tax bases of depreciable assets by $350,000 due to excess MACRS depreciation over straight-line in previous years and an Installment Receivable of $50,000 that will be collected upon and taxed in 2018. Pre-tax accounting income in 2018 and 2019 is $40,000 and $180,000, respectively and includes non-taxable municipal bond interest of $50,000 in 2018 and $60,000 in 2019 . During 2018 straight-line (financial) depreciation exceeded MACRS (tax) by $40,000. In 2019, MACRS (tax) depreciation exceeded straight-line depreciation by $20,000. In 2018, Arsenal received $60,000 in deferred revenue which will be earned evenly over 2019 and 2020. In 2018, Arsenal incurred actual costs to repair products associated with warranties of $450,000, though warranty expense was $200,000. For 2019 , warranty expenses totaled $300,000 and costs to repair incurred under warranty were $310,000. Arsenal also insures the life of its president, Thierry Henry. Premiums of $15,000 were paid in both 2018 and 2019 and Arsenal is the beneficiary on the policy. At the end of 2018, management estimated that the DTA - Valuation Allowance account should have a balance of $8,000. Arsenal's management decided that at the end of 2019 , the valuation allowance should be 5\% of the Deferred Tax Asset balance. The tax rate was 35% for 2017 and 2018 , but during 2018 the U.S. Congress changed the applicable tax rate to 21% for 2019 and all subsequent years. In the event of a net operating loss, Arsenal, Inc. began 2018 with the following balances in deferred tax accounts: The deferred tax asset results from a balance of $500,000 in Warranty Liability. The deferred tax liability results from the financial accounting bases of depreciable assets exceeding the tax bases of depreciable assets by $350,000 due to excess MACRS depreciation over straight-line in previous years and an Installment Receivable of $50,000 that will be collected upon and taxed in 2018. Pre-tax accounting income in 2018 and 2019 is $40,000 and $180,000, respectively and includes non-taxable municipal bond interest of $50,000 in 2018 and $60,000 in 2019 . During 2018 straight-line (financial) depreciation exceeded MACRS (tax) by $40,000. In 2019, MACRS (tax) depreciation exceeded straight-line depreciation by $20,000. In 2018, Arsenal received $60,000 in deferred revenue which will be earned evenly over 2019 and 2020. In 2018, Arsenal incurred actual costs to repair products associated with warranties of $450,000, though warranty expense was $200,000. For 2019 , warranty expenses totaled $300,000 and costs to repair incurred under warranty were $310,000. Arsenal also insures the life of its president, Thierry Henry. Premiums of $15,000 were paid in both 2018 and 2019 and Arsenal is the beneficiary on the policy. At the end of 2018, management estimated that the DTA - Valuation Allowance account should have a balance of $8,000. Arsenal's management decided that at the end of 2019 , the valuation allowance should be 5\% of the Deferred Tax Asset balance. The tax rate was 35% for 2017 and 2018 , but during 2018 the U.S. Congress changed the applicable tax rate to 21% for 2019 and all subsequent years. In the event of a net operating loss