The Ground Up Construction Company began operations in January 2016. After the first year of operations, the following information was provided to you. 1. Pretax financial income: $432,600 2. Differences between financial statement income and the tax return income were as follows: a. Gross profit reported on long-term projects was $165,000 on the financial statement, and $50,000 on the tax return. b. Depreciation expense was $8,000 on the financial statement, and $24,000 on the tax return. c. The company was fined $5,000 for OSHA violations on a construction project. The fine was reported as an expense in the financial statements, however, it is not deductible for tax purposes. d. The company reported $1,000 of tax free interest revenue in the financial statement. Required 1. Prepare a schedule to reconcile F/S income to T/R income. 2. Prepare all journal entries covering taxes for 2016. 3. Prepare the income tax expense Section for the income statement ending December 31, 2016. 4. Compute the effective tax rate for 2016. 5. Tax rate is 40% ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________