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The records for Cappy Co. show the following data for 2022, its first year of...

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Accounting

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The records for Cappy Co. show the following data for 2022, its first year of operations: 1. Machinery was acquired in January for $200,000. For book purposes, straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used, and Cappy deducts 17\% of the asset's cost for 2022 . 2. Interest received on tax exempt lowa State bonds was $7,500. 3. The estimated warranty liability related to 2022 sales was $30,000. Repair costs under warranties during 2022 were $17,500. The remainder is expected to be incurred in 2023 . 4. Pretax financial income is $800,000. The tax rate is 25%. Required: a) Compute taxable income. b) Prepare the journal entry to record income taxes for 2022

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