Taxable income and pretax financial income would be identical for Sunland Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared Taxable income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit collected Expenditures for warranties $151,000 $207,000 $96,200 7,300 7,300 7,300 (5,200) (5,200) (5,200) Taxable income $153,100 $209,100 $98,300 Pretax financial income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit recognized Estimated cost of warranties $151,000 $207,000 $96,200 21,900 0 0 (15,600) 0 0 Income before taxes $157,300 $207,000 $96,200 The tax rates in effect are 2016, 4090; 2017 and 2018, 45%. All tax rates were enacted into law on January 1, 2016, No deferred income taxes existed at the beginning of 2016. Taxable income is expected in all future years