QUESTION 1 (Second Year of Depreciation Difference. Two Differences, Single Rate, Discontinued Operation) The following information has been obtained for Gocker Corporation Prior to 2017, taxable income and pretax financial income were identical 2 Pretax financial income is $1,700,000 in 2017 and 51.400,000 in 2018. 3 On January 1, 2017 equipment conting $1,200,000 is purchased. It is to be depreciated on a straight-line basis over 5 years for tax purposes and over 8 years for financial reporting purposes (Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A) 4. Interest of $60,000 was earned on tax-exempt municipal obligations in 2018. 5. Included in 2018 pretax financial income is again on discontinued operations of $200,000, which is fully taxable 6. The tax rate is 35% for a periods. 7 Taxable income is expected in all future years. Instructions (a) Compute taxable income and income taxes payable for 2018. (b) Prepare the journal entry to record 2018 income tax expense, income taxes payable, and deferred taxes. (c) Prepare the bottom portion of Gocker's 2018 income statement, beginning with income from continuing operations before income taxes. (d) Indicate how deferred income taxes should be presented on the December 31, 2018, balance sheet Attach File Browse Local Files Browse Content Collection