Winx Company began operations at the beginning of 2018. The following information is available for this company: Pretax financial income for 2018 is $210,000. Differences between the 2018 income statement and tax return include: - A $5,000 fine paid for violation of pollution laws was deducted in computing pretax financial income. - Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,000. - Warranty expense accrued for financial reporting purposes is $9,000. Warranty deductions per the tax return amount to $5,000. - Gross profit on construction contracts using the percentage-of-completion method equals $97,000 in the company's books. Gross profit on construction contracts for tax purposes is $65,000. - Depreciation on property, plant and equipment for financial reporting purposes is $60,000. Depreciation for the tax return is $85,000. . The applicable tax rate is 40%. Taxable income is expected for the next few years. Instructions a. For each of the differences above, calculate the dollar amount of the difference and identify if it is a temporary difference or permanent difference. b. Compute taxable income for 2018. c. Compute the deferred tax assets and liabilities at December 31, 2018 that relate to the temporary differences described above. d. Prepare the journal entry to record income tax expense, deferred taxes and income taxes payable for 2018. Maximum number of characters including HTML tags added by text editor): 32,000 Show Rich-Text Editor (and character count)