Cushinson corp. had a beginning inventory of $9,500 (250 units) and made three inventory purchases during the fiscal year: purchases units total cost 3/1/2016 400 $14,800 7/1/2016 450 $14,850 9/1/2016 550 $15,950 the company began operations on jan. 1, 20x6. costing uses the lifo method of determining cost of goods sold. first year sales were 1,300 units. the most likely effects of using lifo inventory costing as compared to fifo in cushinson's 20x6 financial statements are: a) lower net income; lower working capital. b) higher net income; lower working capital. c) higher net income; higher working capital.

Martinez company has the following two temporary differences between its income tax expense and income taxes payable. 2017 2018 2019 pretax financial income $873,000 $866,000 $947,000 (2017' 2018, 2019) excess depreciation expense on tax return (29,400 ) (39,000 ) (9,600 ) (2017' 2018, 2019) excess warranty expense in financial income 20,000 9,900 8,300 (2017' 2018, 2019) taxable income $863,600 $836,900 $945,700(2017' 2018, 2019) the income tax rate for all years is 40%. instructions: a. prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019. b. assuming there were no temporary differences prior to 2016, indicate how deferred taxes will be reported on the 2016 balance sheet. button's warranty is for 12 months. c. prepare the income tax expense section of the income statement for 2017, beginning with the line, "pretax financial income."