The following information has been obtained for Pronghorn Corporation.

1.		Prior to 2020, taxable income and pretax financial income were identical.
2.		Pretax financial income is $1,616,000 in 2020 and $1,379,000 in 2021.
3.		On January 1, 2020, equipment costing $1,184,000 is purchased. It is to be depreciated on a straight-line basis over 5 years for tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A.)
4.		Interest of $59,000 was earned on tax-exempt municipal obligations in 2021.
5.		Included in 2021 pretax financial income is a gain on discontinued operations of $203,000, which is fully taxable.
6.		The tax rate is 20% for all periods.
7.		Taxable income is expected in all future years.

Compute taxable income and income taxes payable for 2021.

Taxable income		$
Income taxes payable		$

Prepare the journal entry to record 2021 income tax expense, income taxes payable, and deferred taxes.

Account Titles and Explanation	Debit	Credit

Prepare the bottom portion of Pronghorns 2021 income statement, beginning with Income from continuing operations before income taxes.

Pronghorn Corporation Income Statement (Partial)
		$
	$
Add Less
		$

Indicate how deferred income taxes should be presented on the December 31, 2021, balance sheet.

Pronghorn Corporation Balance Sheet (Partial)
					$