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Shamrock Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the
Shamrock Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Shamrock's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2020 2021 2022 2023 Taxable amounts $ 41,500 $ 45,100 $ 65,400 $ 72,400 Deductible amounts (15,900 ) ( 18,200 ). $ 41,500 $ 29,200 $ 47,200 $ 72,400 As of the beginning of 2019, the enacted tax rate is 34% for 2019 and 2020, and 20% for 2021-2024. At the beginning of 2019, the company had no deferred income taxes on its balance sheet. Taxable income for 2019 is $ 470,000. Taxable income is expected in all future years. (a) Your answer is correct. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense 203670 Deferred Tax Asset 6820 Income Tax Payable 159800 Deferred Tax Liability 50690 (b) Your answer is partially correct. Indicate how deferred income taxes would be classified on the balance sheet at the end of 2019. Shamrock Inc. Balance Sheet December 31, 2019 Noncurrent Liabilities Deferred Tax Liability 50690 e Textbook and Media Assistance Used List of Accounts
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