Jeonbuk Company has two temporary differences between its income tax expense and income taxes payable. The information is shown below.

The income tax rate for all years is 40%.
Instructions

(a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014, 2015, and 2016.

(b) Assuming there were no temporary differences prior to 2014, indicate how deferred taxes will be reported on the 2016 statement of financial position. Jeonbuk’s product warranty is for 12 months.

(c) Prepare the income tax expense section of the income statement for 2016, beginning with the line “Pretax financial income.”

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Pretax financial income Excess depreciation expense on tax return Excess warranty expense in financial income Taxable income 2014 #840,000,000 W910,000,000 (30,000,000) (40,000,000) 20,000,000 10,000,000 #830,000,000 W880,000,000 2015 2016 W945,000,000 (20,000,000) 8,000,000 #933,000,000