Tax reconciliation.

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KIMCPA is in its first year of operations. The company has pretax income of $200,000 the following items recorded in its records. Estimated tax payments of $10.000 were made during Year 1. Life insurance premiums $1,500 Warranty expense 5,000 Warranty liability 2.000 Rent in advance for next year 1.000 Unrealized holding gain on available-for-sale securities 7.000 Tax rate for Year 1 : 25% Enacted tax rate for Year 2 and thereafter : 30% Instructions (1) Prepare the statement of income during Year 1. Pre-tax financial income Income tax expense-current Income tax expense-deferred Net income Effective tax rate (2) Prepare the tax accounts section of balance sheet as of December 31, Year 1. Income tax payable Deferred tax assets Deferred tax liabilities