Razorback Financial Corp., in its first year of operations in 2018, reported pretax financial income of...

Razorback Financial Corp., in its first year of operations in 2018, reported pretax financial income of $100,000. An investigation of that income revealed the following items:Fines from FDIC for improper practices of $20,000.Installment sales of $30,000 are recognized in financial income. These sales are accounted for by the installment sales method for income tax purposes. Only $10,000 was reported on the tax return.Warranty expenses of $15,000 were accrued for financial reporting purposes, but are not expected to result in a cash payment until 2019.Depreciation on the tax return exceeded depreciation for financial reporting purposes by $40,000.Assume that any deferred tax assets are considered more likely than not to be realized. The enacted income tax rate for all years is 30%.REQUIRED:(a) Compute taxable income.(b) Prepare the income tax journal entry for Razorback Financial Corp. on December 31, 2018.

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