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Nadal Inc. has two temporary differences at the end of 2013. The first difference stems from installment sales, and the second one results from the

Nadal Inc. has two temporary differences at the end of 2013. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Nadals accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2014 2015 2016 2017 Taxable amounts $40,000 $50,000 $60,000 $80,000 Deductible amounts (15,000 ) (19,000 ) $40,000 $35,000 $41,000 $80,000 As of the beginning of 2013, the enacted tax rate is 34% for 2013 and 2014, and 38% for 20152018. At the beginning of 2013, the company had no deferred income taxes on its balance sheet. Taxable income for 2013 is $500,000. Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2013. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Indicate how deferred income taxes would be classified on the balance sheet at the end of 2013. Nadal Inc. Balance Sheet December 31, 2013 $ $

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