Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2017. 1. Monty Co. has developed the following schedule of future taxable and deductible amounts.

		2018		2019		2020		2021			2022
Taxable amounts		$400		$400		$400		$400			$400
Deductible amount								(2,500)

2. Flounder Co. has the following schedule of future taxable and deductible amounts.

		2018		2019		2020			2021
Taxable amounts		$400		$400		$400			$400
Deductible amount						(2,800)

Both Monty Co. and Flounder Co. have taxable income of $4,800 in 2017 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2017 are 30% for 20172020 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities. 1. Compute the net amount of deferred income taxes to be reported at the end of 2017, and indicate how it should be classified on the balance sheet for situation one.

Deferred income taxes to be reported at the end of 2017 in Monty co.

$

2. Compute the net amount of deferred income taxes to be reported at the end of 2017, and indicate how it should be classified on the balance sheet for situation two.

Deferred income taxes to be reported at the end of 2017 in Flounder co.

$

List of Accounts

• Allowance to Reduce Deferred Tax Asset to Expected Realizable Value
• Benefit Due to Loss Carryback
• Benefit Due to Loss Carryforward
• Deferred Tax Asset
• Deferred Tax Liability
• Income Tax Expense
• Income Tax Payable
• Income Tax Refund Receivable
• No Entry

*USE ONLY ABOVE LIST OF ACCOUNTS

*SHOW ALL WORK

*USE TEMPLATES AS ABOVE

*ANSWER ALL PARTS

THANK YOU!!!

MONTY CO. Balance Sheet FLOUNDER CO. Balance Sheet