Flynn Inc. has two temporary differences at the end of 2019. The first difference stems from installment
Question:
Flynn Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Flynn's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows.
As of the beginning of 2019, the enacted tax rate is 34% for 2019 and 2020, and 38% for 2021-2024. At the beginning of 2019, the company had no deferred income taxes on its statement of financial position. Taxable income for 2019 is $400,000. Taxable income is expected in all future years.
Instructions
a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019.
b. Indicate how deferred income taxes would be classified on the statement of financial position at the end of 2019?
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield