At December 31, 2016, Flint Company had a net deferred tax liability of $373,300. An explanation of the items that compose this balance is as follows.

In analyzing the temporary differences, you find that $32,800 of the depreciation temporary difference will reverse in 2017, and $131, 100 of the temporary difference due to the installment sale will reverse in 2017. The tax rate for all years is 40%.

Indicate the manner in which deferred taxes should be presented on Flint Company's December 31, 2016, balance sheet.

 

Temporary Differences 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. Resulting Balances in Deferred Taxes $215,100 (54,700) 212,900 $373,300 Temporary Differences 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. Resulting Balances in Deferred Taxes $215,100 (54,700) 212,900 $373,300 Temporary Differences 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. Resulting Balances in Deferred Taxes $215,100 (54,700) 212,900 $373,300 Temporary Differences 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. Resulting Balances in Deferred Taxes $215,100 (54,700) 212,900 $373,300