Assume the same information as in E19.12 for Callaway SA.

Instructions

a. Record income tax expense, deferred income taxes, and income taxes payable for 2022, assuming that it is probable that €20,000 of the deferred tax asset will be realized in full.

b. Record income tax expense, deferred income taxes, and income taxes payable for 2022, assuming that it is probable that none of the deferred tax asset will be realized.

E19.12

Callaway SA has a deferred tax asset account with a balance of €150,000 at the end of 2021 due to a single cumulative temporary difference of €375,000. At the end of 2022, this same temporary difference has increased to a cumulative amount of €500,000. Taxable income for 2022 is €850,000. The tax rate is 40% for all years.