Computer Project FINANCIAL REPORTING II - SPRING 2017 As a recently hired accountant for Reeves Incorporated., you are provided with last year's balance sheet to familiarize yourself with the business. Reeves Incorporated Balance Sheet December 31, 2016 Assets Current Assets Cash Accounts Receivable Short-term Investments $1,054.312 123,200 738,054 578,366 Inventories Prepaid Expenses Total Current Assets Property, plant and equip (net) Intangibles and other assets Total Assets Current Liabilities 82,310 $2,576,242 832,400 692,175 $4,100,817 Accounts payable 69,210 Short-term notes 131,870 Other current liabilities 200,574 Total Current Liabilities $401,654 Long-term debt 1,962,357 Total Liabilities $2,364,011 Stockholders' Equity Common Stock 1,421,300 Retained Earnings 315,506 Total Stockholder's Equity $1,736,806 Total liabilities + Stockholder's $4,100,817 5. The information that follows pertains to the Reeves Company: 1. At December 31, 2017, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation Prepaid expenses Warranty expenses 2. No temporary differences existed at the beginning of 2017. $60,000 17,000 (12,000) 3. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31, 2017. 4. The tax rate is 40%. Required: Determine the amounts necessary to record income taxes for 2017 and prepare the appropriate journal entry. CALCULATIONS TO DETERMINE INCOME TAX EXPENSE DATE DESCRIPTION DEBIT CREDIT 31-Dec