Delmarva Company, during its first year of operations in 2020, reported taxable income of $170,000 and pretax financial income of $100,000. The difference between taxable income and pretax financial income was caused by two timing differences: excess depreciation on tax return, $70,000; and warranty expenses in excess of warranty payments, $40,000. These two timing differences will reverse in the next three years as follows:

Year	Depreciation	Warranty Expenses
2021	$10,000	$20,000
2022	20,000	16,000
2023	40,000	4,000

Enacted tax rates are 30% for 2020, 35% for 2021 and 2022, and 40% for 2023.

Required:

Prepare the income tax journal entry for Delmarva Company for December 31, 2020.

CHART OF ACCOUNTS

Delmarva Company

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
160	Deferred Tax Asset
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
260	Deferred Tax Liability
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expense
910	Income Tax Expense

General Journal

Prepare the income tax journal entry for Delmarva Company for December 31, 2020.