The following data represent the diffence between accounting and tax income for Seafood Imports Inc., whose pre-tax accounting income is $695,000 for the year ended December 31. The company's income tax rate is 45%. Additional information relevant to income taxes includes the following.

a. Capital cost allowance of $270,000 exceeded accounting depreciation expense of $157,000 in the current year.

b. Rents of $29,000, applicable to next year, had been collected in December and deferred for financial statement purposes but are taxable in the year received.

c. In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below:

ii. Warranty Expense for the Year 42,500

iii. Payments made to fulfill product warranties. 35,000

d. Insurance expense to cover the company's excutive officers was $7,500 for the year.

Required:

1.calculate taxable income

2. Prepare all the journal entries to record income taxes for Seafood imports.