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Van Dyck and Co. is preparing its 2017 financial statements. It has two items of depreciable property: both are depreciated using straight-line for financial reporting purposes. One is a set of computers (and related peripherals) with an estimated life of 3 years and no salvage value which was bought in 2015 for $85,000, and the other is a set of office furniture with an estimated life of 9 years and no salvage value which was purchased in 2013 for $350,000. Van Dyck has operating income in 2017 of $65,000, which includes municipal bond interest of $55,000. Van Dyck had paid taxes in the past two years of $90,000. In addition, in the current year, Van Dyck has deducted expenses totaling $32,000 which it is uncertain will hold up in their entirety if challenged by the IRS. The accountants believe that there is a 25% chance none will be upheld, a 15% chance $12,000 will be upheld, a 30% chance $22,000 will be upheld, and a 30% chance they will be upheld in their entirety. Assume a statutory tax rate of 35%. Prepare all relevant adjusting entries for income tax expense and any income tax accruals/deferrals for 2017.

Van Dyck and Co. is preparing its 2017 financial statements. It has two items of depreciable property: both are depreciated using straight-line for financial reporting purposes. One is a set of computers (and related peripherals) with an estimated life of 3 years and no salvage value which was bought in 2015 for $85,000, and the other is a set of office furniture with an estimated life of 9 years and no salvage value which was purchased in 2013 for $350,000. Van Dyck has operating income in 2017 of $65,000, which includes municipal bond interest of $55,000. Van Dyck had paid taxes in the past two years of $90,000. In addition, in the current year, Van Dyck has deducted expenses totaling $32,000 which it is uncertain will hold up in their entirety if challenged by the IRS. The accountants believe that there is a 25% chance none will be upheld, a 15% chance $12,000 will be upheld, a 30% chance $22,000 will be upheld, and a 30% chance they will be upheld in their entirety. Assume a statutory tax rate of 35%. Prepare all relevant adjusting entries for income tax expense and any income tax accruals/deferrals for 2017. Please Please show your calculations meaning where are numbers coming from.

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