The information that follows pertains to Julia Company: Temporary differences for the year 2021 are summarized below. Expenses deducted in the tax return, but not included in the income statement: Depreciation $ 67,000 Prepaid expense $ 8,700 Expenses reported in the income statement, but not deducted in the tax return: Warranty expense $ 9,700 (b.) No temporary differences existed at the beginning of 2021. (c.) Pretax accounting income was $74,700 and taxable income was $8,700 for 2021. (d.) There were no permanent differences. (e.) The tax rate is 40%.
