1) Teri Hatcher Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2013.

		Book Basis		Tax Basis
Equipment (net)		$408,500		$331,800
Estimated warranty liability		$203,200		$ 0

It is estimated that the warranty liability will be settled in 2014. The difference in equipment (net) will result in taxable amounts of $24,400 in 2014, $37,300 in 2015, and $15,000 in 2016. The company has taxable income of $549,300 in 2013. As of the beginning of 2013, the enacted tax rate is 37% for 20132015, and 32% for 2016. Hatcher expects to report taxable income through 2016.

2) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2013. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
Income Tax Expense
Deferred Tax Asset
Income Tax Payable
Deferred Tax Liability

3) Indicate how deferred income taxes will be reported on the balance sheet at the end of 2013.