Problem 19-4

The accounting records of Bonita Inc. show the following data for 2017 (its first year of operations).

1.		Life insurance expense on officers was $9,300.
2.		Equipment was acquired in early January for $324,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Bonita used a 30% rate to calculate depreciation.
3.		Interest revenue on State of New York bonds totaled $3,600.
4.		Product warranties were estimated to be $51,200 in 2017. Actual repair and labor costs related to the warranties in 2017 were $9,000. The remainder is estimated to be paid evenly in 2018 and 2019.
5.		Gross profit on an accrual basis was $91,000. For tax purposes, $71,100 was recorded on the installment-sales method.
6.		Fines incurred for pollution violations were $3,800.
7.		Pretax financial income was $715,600. The tax rate is 30%.

Prepare a schedule starting with pretax financial income in 2017 and ending with taxable income in 2017. (Enter negative amounts using either a negative sign preceding the nu. 45 or parentheses e.g. (45).) Schedule of Pretax Financial Income and Taxable Income for 2017 Pretax financial income Permanent differences Temporary differences Taxable income