Required: (a). Prepare a schedule starting with pretax financial income and compute taxable income (b). Prepare journal entry to record income taxes for 2018

Apple Company began operations in 2018 and has provided the following intormation. 1. Differences between the 2018 income statement and tax return are listed below. A. The MACRS depreciation system is used for tax purposes $5,000, and the straight-line depreciation method is used for financial reporting purposes $2,000. B. A landlord collects some rents in advance $3,000. Rents received are taxable in the period when they are received. C. Expenses are incurred in obtaining tax-exempt income $1,500. D. Costs of guarantees and warranties are estimated and accrued for financial reporting purposes $2,000. E. Installment sales of investments are accounted for by the accrual method for financial reporting purposes $3,000 and the installment-sales method for tax purposes $2,000. F. Proceeds are received from a life insurance company because of the death of a key officer $1,000 (the company carries a policy on key officers). 2. Pretax financial income for 2018 is $50,000. 3. The tax rate enacted for 2018 and future years is 40%. 4. Taxable income is expected for the next few years