Reference no: EM131208443

The accounting records of Shinault Inc. show the following data for 2014. 1. Life insurance expense on officers was $8,400. 2. Equipment was acquired in early January for $341,100. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Shinault used a 30% rate to calculate depreciation. 3. Interest revenue on State of New York bonds totaled $5,800. 4. Product warranties were estimated to be $59,000 in 2014. Actual repair and labor costs related to the warranties in 2014 were $16,400. The remainder is estimated to be paid evenly in 2015 and 2016. 5. Gross profit on an accrual basis was $102,000. For tax purposes, $84,800 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were $6,500. 7. Pretax financial income was $771,400. The tax rate is 30%. 1. Prepare a schedule starting with pretax financial income in 2014 and ending with taxable income in 2014. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2. Prepare the journal entry for 2014 to record income taxes payable, income tax expense, and deferred income taxes. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)