Professional Simulation In this simulation, you are asked to address questions related to the accounting for taxes. Prepare responses to all parts. KWW Professional Simulation Accounting Time Remaining for Taxes 2 hours 40 minutes Unit Solt Hori Split Vertical Spreadshow Calculator Ex Deaction Journal Entry Financial Statements Resources Johnny Bravo Company began operations in 2012 and has provided the following information 1. Pretax financial income for 2012 is $100,000 2. The tax rate enacted for 2012 and future years is 40%. 3. Differences between the 2012 income statement and tax return are listed below. (a) Warranty expense accrued for financial reporting purposes amounts to $5,000. Warranty deductions per the tax return amount to $2,000.. (b) Gross profit on construction contracts using the percentage of completion method for book purposes amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $62,000. (c) Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000 Depreciation of these assets amounts to $80,000 for the tax return (d) A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income (e) Interest revenue eamed on an investment in tax-exempt municipal bonds amounts to $1,400. 4. Taxable income is expected for the next few years. Sustion deurnal Entry Panel Statemente resources Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2012. Dwectione GO Directions ournal Entry Ornanclas Sistements Mesources Draft the income tax expense section of the income statement beginning with "Income before income taxes