ABC Company keeps their accounting records on the cash basis. During the year, ABC received $270,000 from clients, and ABC paid $85,000 to cover operating expenses. Account balances as of the dates given are as follow: Jan 1 Dec 31 Change Accounts Receivable $24,000 $52,000 $28,000 Accrued Liabilities $56,000 $40,000 (16,000) Unearned Revenue $35,000 $45,000 10,000 Prepaid Expenses $26,000 $28,000 2,000 In addition, depreciation expense for the current year is $12,000. Net Income on the accrual basis is:

Martinez company has the following two temporary differences between its income tax expense and income taxes payable. 2017 2018 2019 pretax financial income $873,000 $866,000 $947,000 (2017' 2018, 2019) excess depreciation expense on tax return (29,400 ) (39,000 ) (9,600 ) (2017' 2018, 2019) excess warranty expense in financial income 20,000 9,900 8,300 (2017' 2018, 2019) taxable income $863,600 $836,900 $945,700(2017' 2018, 2019) the income tax rate for all years is 40%. instructions: a. prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019. b. assuming there were no temporary differences prior to 2016, indicate how deferred taxes will be reported on the 2016 balance sheet. button's warranty is for 12 months. c. prepare the income tax expense section of the income statement for 2017, beginning with the line, "pretax financial income."