Marty's Wholesaling Co. opened its doors on Jan. 15, 2012. At the end of 2012, the following was provided for the senior accountant.

At the end of 2012, the following was provided for the senior accountant. Pretax financial incomeEstimated lawsuit settlement expenseInstallment salesTaxable incomeSolution:Income tax expense = (600000+600000)*30% = 360000Law suit settlement expense is assumed to be zero.