Problem I: Fred Corp. is in its first year of operation. The company has pretax financial income of $650,000. The company has the following items recorded in its records. No estimated tax payments were made during 2020. Proceeds of life insurance for its key officers 1,000,000 Tax depreciation in excess of book depreciation 11,000 Hazardous waste dumping fine 8,800 Warranty expense 5,000 Actual warranty repairs 6,500 Bad debt expense 3,000 Beginning balance in allowances for uncollectible accounts 1,000 End balance in allowances for uncollectible accounts 1,250 Tax rates for 2020 and future years 20%

INSTRUCTIONS: (a) Determine taxable income for 2020. (b) Make the journal entry to record income taxes for 2020. (c) Prepare the income tax expense section of the income statement for the year ended Dec. 31, 2020. (d) Indicate how deferred income taxes should be presented on the balance sheet on Dec. 31, 2020.