Pumpkin Company, during its first year of operations in 2016, reported taxable income of $170,000 and pretax financial income of $100,000. The difference between taxable income and pretax financial income was caused by two timing differences: excess depreciation on tax return, $70,000; and warranty expenses in excess of warranty payments, $40,000. These two timing differences will reverse in the next three years as follows: Warranty Year Depreciation Expense 2017 $ 10,000 20,000 2018 20,000 16,000 2019 S 40,000 S 4,000 Enacted tax rates are: 2017 30% 2018 35% 2019 40% Required: Prepare the income tax journal entry for December 31, 2016