Question: 1. The accounting records of Lyndon Inc. show the following data for 2017 (its first year of operations):
a. Life insurance expense on officers was $9,000.
b. Equipment was acquired in on January 1, for $300,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Lyndon used a 30% rate to calculate depreciation.
c. Interest revenue on New York State bonds totaled $4,000.
d. Product warranties were estimated to be $50,000 in 2017. The entity did not make cash outlays for warranty claims until 2018.
e. Fines incurred for pollution violations were $4,200.
f. Pretax financial income was $750,000. The tax rate is 30%.
Required: Prepare a schedule to arrive at adjusted pretax financial reporting income (reflecting all permanent difference). Analyze the temporary differences and prepare the journal entry to account for 2017 income taxes.