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Atacama Corporation reports a net income before tax for 2018 of $520,000, has a tax...

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Accounting

Atacama Corporation reports a net income before tax for 2018 of $520,000, has a tax rate of 35% and provides the following selected information (covers both tax difference items) from its ledger as at December 31, 2017 and 2018:

2017 2018

Equipment, at cost 750,000 DR ----- 990,000 DR

Accumulated depreciation, equipment 390,000 CR ----- 465,000 CR

Deferred Tax Asset 18,200 DR ---- X

Warranty Liability 52,000 CR ---- 60,000 CR

Deferred Tax Liability 105,000 CR ---- X

Depreciation expense, equipment ---- 75,000 DR

Warranty expense ---- 48,000 DR

The tax basis of the equipment (book value for tax purposes or the amount of the cost of the asset not yet deducted for tax purposes) is $60,000 at December 31, 2017 and $125,000 as at December 31, 2018. Atacama purchased a new asset in 2018 for $240,000. The tax deduction for warranties is limited to actual warranty payments. During 2018 new legislation was enacted that lowered Atacama Corporations tax rate for 2019 and all subsequent years to 21%.

What was taxable income for 2018?

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