Martinez Company has the following two temporary differences between its income tax expense and income taxes payable.

		2017			2018			2019
Pretax financial income		$864,000			$917,000			$909,000
Excess depreciation expense on tax return		(30,400	)		(38,500	)		(9,800	)
Excess warranty expense in financial income		19,400			10,100			8,300
Taxable income		$853,000			$888,600			$907,500

The income tax rate for all years is 40%.

- Assuming there were no temporary differences prior to 2017, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019.

- Indicate how deferred taxes will be reported on the 2019 balance sheet. Martinezs product warranty is for 12 months.

- Prepare the income tax expense section of the income statement for 2019, beginning with the line Pretax financial income."