17. Everly Fair had $7 million of Income Before Income Tax. In addition, they had $300,000 of interest income from the

[answerhappygod]

17. Everly Fair had $7 million of Income Before Income
Tax. In addition, they had $300,000 of interest income from
their investment in State of South Carolina bonds. Everly
Fair paid environmental fines of $600,000 of fines levied by the
Environmental Protection Agency due to their failure to properly
install air filtration devices by the statutory deadline.
Everly Fair had future taxable amounts of $800,000 resulting from
MACRS tax depreciation of fixed assets exceeding US GAAP
depreciation, recorded on a straight-line basis by Everly
Fair. The Company offers a 4 year warranty on al of the
products which they manufacture, and have a future taxable amount
of $400,000 for differences between when the warranty expense is
recognized under US GAAP and when deducted, as paid, under the US
Tax Code. The combined Federal & State tax rate was
40%.
Prepare the Journal Entry to record Everly Fair’s Income Tax
Provision (be sure to separate Income Tax Expense between Current
and Deferred).