Wicks Corporation began operations on January 1, 2007. At the end of 2007 the company reported pretax financial income of $60,000 and taxable income of $57,700, due to two temporary differences. The income tax rate is 30% for 2007, but Congress has enacted a tax rate of 35% for 2007 and beyond. To determine its deferred taxes, the company prepared the following schedule of expected future taxable and deductible amounts for the two temporary differences:

Required
1. Prepare the income tax journal entry of the Wicks Corporation at the end of 2007. Assume a valuation allowance is not required.
2. Prepare the lower portion of the 2007 income statement for the WicksCorporation.

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2008 $4,900 2009 $4,200 2010 $ 4,600 (15,500) 2011 Future taxable amounts Future deductible amount $4,100