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The pretax financial income of Oriole Company differs from its taxable income throughout each of...

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Accounting

The pretax financial income of Oriole Company differs from its taxable income throughout each of 4 years as follows.

Year

Pretax Financial Income

Taxable Income

Tax Rate
2017 $285,000 $178,000 35 %
2018 318,000 234,000 40 %
2019 381,000 282,000 40 %
2020 402,000 593,000 40 %

Prepare the income statement for 2018, beginning with income before income taxes. Pretax financial income for each year includes a nondeductible expense of $28,600 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2017.

Prepare the income statement for 2018, beginning with income before income taxes.

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