The accounting records of Crane Inc. show the following data for 2025 (its first year of operations).
1.
Life insurance expense on officers was $8,300.
2.
Equipment was acquired in early January for $308,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Crane
used a 30% rate to calculate depreciation.
3.
Interest revenue on State of New York bonds totaled $3,600.
4.
Product warranties were estimated to be $54,600 in 2025. Actual repair and labor costs related to the warranties in 2025 were $11,000. The remainder is
estimated to be paid evenly in 2026 and 2027.
5.
Gross profit on an accrual basis was $108,000. For tax purposes, $72,700 was recorded on the installment-sales method.
6.
Fines incurred for pollution violations were $3,800.
7.
Pretax financial income was $751,800. The tax rate is 30%.
(a)
Prepare a schedule starting with pretax financial income in 2025 and ending with taxable income in 2025.