Reference no: EM132526731

Question - The accounting records of Marigold Inc. show the following data for 2017 (its first year of operations).

1. Life insurance expense on officers was $9,000.

2. Equipment was acquired in early January for $317,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Marigold used a 30% rate to calculate depreciation.

3. Interest revenue on State of New York bonds totaled $3,800.

4. Product warranties were estimated to be $48,400 in 2017. Actual repair and labor costs related to the warranties in 2017 were $9,300. The remainder is estimated to be paid evenly in 2018 and 2019.

5. Gross profit on an accrual basis was $103,000. For tax purposes, $79,000 was recorded on the installment-sales method.

6. Fines incurred for pollution violations were $4,000.

7. Pretax financial income was $722,700. The tax rate is 30%.

Required - Prepare the journal entry for 2017 to record income taxes payable, income tax expense, and deferred income taxes.