The long-term liabilities section of CPS Transportations December 31, 2017, balance sheet included the following: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

TABLE 5 Future Value of an Annuity Due of $1 FVAD = (1 + i)" 1 *(1 + i) n/i 1 2 3 4 5 1.0% 1.0100 2.0301 3.0604 4.1010 5.1520 1.5% 1.0150 2.0452 3.0909 4.1523 5.2296 2.0% 2.5% 1.0200 1.0250 2.0604 2.0756 3.1216 3.1525 4.2040 4.2563 5.3081 5.3877 3.0% 3.5% 4.0% 1.0300 1.0350 1.0400 2.0909 2.1062 2.1216 3.1836 3.2149 3.2465 4.30914.3625 4.4163 5.4684 5.5502 5.6330 4.5% 1.0450 2.1370 3.2782 4.4707 5.7169 5.0% 1.0500 2.1525 3.3101 4.5256 5.8019 5.5% 1.0550 2.1680 3.3423 4.5811 5.8881 6.0% 1 .0600 2.1836 3.3746 4.6371 5.9753 7.0% 8.0% 0.0% 1.0700 1.0800 1.0900 2.2149 2.2464 2.2781 3.4399 3.5061 3.5731 4.75074 .8666 4.9847 6.15336.33596.5233 10.0% 11.0% 12.0% 1.1000 1.1100 1.1200 2.3100 2.3421 2.3744 3.6410 3.7097 3.7793 5.10515.2278 5.3528 6.7156 6.91297.1152 20.0% 1.2000 2.6400 4.3680 6.4416 8.9299 6 6.2135 6.3230 6.4343 6.5474 6.6625 6.7794 6.89837.0192 7 7.2857 7.4328 7.5830 7.7361 7.8923 8.0517 8.2142 8.3800 8 8.3685 8.5593 8.7546 8.9545 9.1591 9.3685 9.5828 9.8021 9 9.4622 9.7027 9.9497 10.2034 10.4639 10.7314 11.0061 11.2882 10 10.5668 10.8633 11.1687 11.4835 11.8078 12. 1420 12.4864 12.8412 7.1420 8.5491 10.0266 11.5779 13.2068 7.26697.3938 7.6540 8.7216 8.8975 9.2598 10.2563 10.4913 10.9780 11.8754 12.1808 12.8164 13.5835 13.9716 14.7836 7.9228 9.6366 11.4876 13.4866 15.6455 8.2004 10.0285 12.0210 14.1929 16.5603 8.4872 10.4359 12.5795 14.9374 17.5312 8.7833 9.0890 10.8594 11.2997 13.1640 13.7757 15.7220 16.5487 18.5614 19.6546 11.9159 15.4991 19.7989 24.9587 31.1504 11 11.6825 12.0412 12.4121 12.7956 13.1920 13.6020 14.0258 12 12.8093 13.2368 13.6803 14.1404 14.6178 15.1130 15.6268 13 13.9474 14.4504 14.9739 15.5190 16.0863 16.6770 17.2919 14 15.0969 15.6821 16.2934 16.9319 17.5989 18.2957 19.0236 15 16.2579 16.9324 17.6393 18.3802 19.1569 19.9710 20.8245 14.4640 16.1599 17.9321 19.7841 21.7193 14.9171 16.7130 18.5986 20.5786 22.6575 15.3856 15.8699 16.8885 17.286817.8821 19.1406 19.2926 20.0151 21.5505 21.4087 22.2760 24.1290 23.6411 24.6725 26.8881 17.9771 19.1407 20.3843 20.4953 21.9534 23.5227 23.2149 25.0192 26.9750 26.1521 28.3609 30.7725 29.3243 32.0034 34.9497 21.7132 23.1331 25.2116 27.0291 29.0949 31.3926 33.4054 36.2797 38.1899 41.7533 38.5805 47.4966 58.1959 71.0351 86.4421 16 17.4304 18.2014 19.0121 19.8647 20.7616 21.7050 22.6975 17 18.6147 19.4894 20.4123 21.3863 22.4144 23.4997 24.6454 18 19.8109 20.7967 21.8406 22.9460 24.1169 25.3572 26.6712 19 21.0190 22.1237 23.2974 24.5447 25.8704 27.2797 28.7781 20 22.2392 23.4705 24.7833 26.1833 27.6765 29.2695 30.9692 23.7417 25.8551 28.0636 30.3714 32.7831 24.8404 27.1324 29.5390 32.0660 34.7193 25.9964 27.2129 29.840232.7502 35.9737 39.5447 28.4812 29.9057 32.9990 36.4502 40.3013 44.5992 31.1027 32.7600 36.3790 40.4463 45.0185 50.1591 33.8683 35.7856 39.9955 44.7620 50.1601 56.2750 36.786138.9927 43.8652 49.4229 55.7645 63.0025 43.5008 47.8837 104.9306 49.3959 54.7497 127.1167 55.9395 62.4397 153.7400 63.2028 71.0524 185.6880 71.2651 80.6987 224.0256 21 23.4716 24.8376 26.2990 27.8629 29.5368 31.3289 33.2480 35.3034 37.5052 39.8643 42.3923 48.0057 54.4568 61.8733 70.4027 80.2143 91.5026 270.0307 25 28.5256 30.5140 32.6709 35.0117 37.5530 40.3131 43.3117 46.5706 50.1135 53.9660 58.1564 67.6765 78.9544 92.3240 108.1818 126.9988 149.3339 566.3773 30 35.1327 38.1018 41.3794 45.0003 49.0027 53.4295 58.3283 63.7524 69.7608 76.4194 83.8017 101.0730 122.3459 148.5752 180.9434 220.9132 270.2926 1418.2579 40 49.3752 55.0819 61.6100 69.0876 77.6633 87.5095 98.8265 111.8467 126.8398 144.1189 164.0477 213.6096 279.7810 368.2919 486.8518 645.8269 859.1424 8812.6294 The long-term liabilities section of CPS Transportation's December 31, 2017, balance sheet included the following: (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) a. A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1: Lease liability Less: current portion $76,061 2,394 $73,667 The incremental borrowing rate at the inception of the lease was 11% and the lessor's implicit rate, which was known by CPS Transportation, was 10%. b. A deferred income tax liability due to a single temporary difference. The only difference between CPS Transportation's taxable income and pretax accounting income is depreciation on a machine acquired on January 1, 2017, for $500,000. The machine's estimated useful life is five years, with no salvage value. Depreciation is computed using the straight-line method for financial reporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for 2018 through 2021 is as follows: Year 2018 2019 2020 2021 MACRS Depreciation $160,000 80,000 70,000 60,000 Straight-line Depreciation $100,000 100,000 100,000 100,000 Difference $ 60,000 (20,000) (30,000) (40,000) The enacted federal income tax rates are 35% for 2017 and 40% for 2018 through 2021. For the year ended December 31, 2018, CPS's income before income taxes was $900,000. On July 1, 2018, CPS Transportation issued $800,000 of 9% bonds. The bonds mature in 20 years and interest is payable each January 1 and July 1. The bonds were issued at a price to yield the investors 10%. CPS records interest at the effective interest rate. Required: 1. Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2018. 2. Determine CPS Transportation's interest expense for the year ended December 31, 2018. 3. Prepare the long-term liabilities section of CPS Transportation's December 31, 2018, balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2018. CPS TRANSPORTATION Income Tax Expense and Net Income For the Year Ended December 31, 2018 Income before income taxes Income tax expense: Current Deferred Net income Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine CPS Transportation's interest expense for the year ended December 31, 2018. (Do not round intermediate calculations. Round final answers to the nearest whole dollars.) CPS TRANSPORTATION Calculation of Interest Expense For the Year Ended December 31, 2018 Capital lease obligation interest Bond interest payable Total interest expense Required 1 Required 3 > Required: 1. Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2018. 2. Determine CPS Transportation's interest expense for the year ended December 31, 2018 3. Prepare the long-term liabilities section of CPS Transportation's December 31, 2018, balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the long-term liabilities section of CPS Transportation's December 31, 2018, balance sheet. (Do not round intermediate calculations. Round final answers to the nearest whole dollars.) CPS TRANSPORTATION Long-Term Liabilities Section of Balance Sheet December 31, 2018 Long-term liabilities: Lease liability Less: current portion Bonds payable, net Deferred income tax liability Total long-term liabilities $ 0