The 20X6 records of Laredo Inc. show the following reconciliation of accounting and taxable income:

In 20X5, Laredo had reported an operating loss, the tax benefit of which was fully recognized in 20X5 through loss carryback and recognition of a deferred income tax asset. Selected SFP accounts at the end of 20X5:

UCC at the end of 20X5 was $468,000. Depreciation expense in 20X6 was $41,000. The enacted tax rate in 20X5 was 32%. The enacted tax rate in 20X6 was 38%.

Required:
1. Prepare the income tax entries for 20X6.
2. Present the lower portion of the 20X6 SCI.

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Earnings per the financial statements Plus (minus): Dividend revenue CCA in excess of depreciation Warranty payments in excess of expense Non-tax-deductible expenses Taxable income $124,000 (2,900) (42,300) (500) 2,900 $ 81,200