during 2017, abernethy reported net income of $129,000 while declaring and paying dividends of $16,000. during 2018, abernethy reported net income of $176,000 while declaring and paying dividends of $38,000.
assume that chapman company acquired abernethy’s common stock by paying $768,600 in cash. all of abernethy’s accounts are estimated to have a fair value approximately equal to present book values. chapman uses the partial equity method to account for its investment.
prepare the consolidation worksheet entries for december 31, 2017, and december 31, 2018.

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."