The following information was disclosed during the audit of Elbert Inc.

1.		Year		Amount Due per Tax Return
		2017		$130,000
		2018		104,000

2.		On January 1, 2017, equipment costing $600,000 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5-year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.)
3.		In January 2018, $225,000 is collected in advance rental of a building for a 3-year period. The entire $225,000 is reported as taxable income in 2018, but $150,000 of the $225,000 is reported as unearned revenue in 2018 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2019 and 2020.
4.		The tax rate is 40% in 2017 and all subsequent periods. (Hint: To find taxable income in 2017 and 2018, the related income taxes payable amounts will have to be grossed up.)
5.		No temporary differences existed at the end of 2016. Elbert expects to report taxable income in each of the next 5 years.

Question: Draft the income tax section of the income statement for 2018, beginning with Income before income taxes.