Macinski Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2019.

It is estimated that the warranty liability will be settled in 2020. The difference in equipment (net) will result in taxable amounts of $20,000 in 2020, $30,000 in 2021, and $10,000 in 2022. The company has taxable income of $550,000 in 2019. As of the beginning of 2019, the enacted tax rate is 34% for 2019-2021, and 30% for 2022. Macinski expects to report taxable income through 2024.
Instructions
a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019.
b. Indicate how deferred income taxes will be reported on the statement of financial position at the end of 2019.

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Book Basis Tax Basis Equipment (net) Estimated warranty liability $400,000 $340,000 150,000 -0- -