For the year 2019, Jones Inc. recorded book and tax income, prior to consideration all revenue and expense items except for proceeds from sales of magazine subscriptions, of $200,000. During the year, Jones collected $40,000 from sales of magazine subscriptions. As the end of the year, none of these magazines had been delivered. For tax purposes, Jones records all of these collections as income. It is anticipated that 60% of the magazines will be mailed during 2020 with the remainder mailed in 2021. The tax rate in 2019, 2020, and 2021 is 21%. Assume that there were no temporary differences at the beginning of the year. Complete each of the following steps, in good form. Show your work.

1. Calculate the current income tax payable by multiplying the taxable income by the tax rate for the current year.

2. Calculate the ending balance in the deferred tax asset and/or liability. This requires determination of temporary differences caused by differences between the book basis and tax basis for assets and liabilities.

3. Determine the debit or credit to the deferred tax asset and/or liability needed to arrive at the ending balance determined in step 2.

4. Use the credit from step 1 with any debit and/or credit from step 3 to determine the entry to income tax expense. 5. What is Jones Inc. net income during 2019?