Exercise 19-2

The following information is available for Tamarisk Corporation for 2016 (its first year of operations).

1.		Excess of tax depreciation over book depreciation, $40,000. This $40,000 difference will reverse equally over the years 20172020.
2.		Deferral, for book purposes, of $21,500 of rent received in advance. The rent will be recognized in 2017.
3.		Pretax financial income, $315,900.
4.		Tax rate for all years, 40%.

Compute taxable income for 2016.

Taxable income

$

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming taxable income of $303,600. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit