Exercise 19-13

Whispering Corp. has a deferred tax asset account with a balance of $164,640 at the end of 2016 due to a single cumulative temporary difference of $411,600. At the end of 2017, this same temporary difference has increased to a cumulative amount of $416,500. Taxable income for 2017 is $794,100. The tax rate is 40% for all years. At the end of 2016, Whispering Corp. had a valuation account related to its deferred tax asset of $43,300. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that the deferred tax asset will be realized in full. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To record income taxes.)
(To adjust allowance account.)

(b) Record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that none of the deferred tax asset will be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To record income taxes.)
(To record allowance.)