Exercise 19-19

Ivanhoe 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. Ivanhoe'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$42,700

$45,900

$64,300

$81,400

Deductible amounts(13,600

)

(18,900

)

$42,700

$32,300

$45,400

$81,400

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 $511,000. Taxable income is expected in all future years.

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 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Indicate how deferred income taxes would be classified on the balance sheet at the end of 2019.

IvanhoeInc.

Balance Sheet

December 31, 2019

For the Year Ended December 31, 2019

For the Quarter Ended December 31, 2019

Total Intangible Assets

Intangible Assets

Total Property, Plant and Equipment

Total Long-term Liabilities

Total Assets

Total Liabilities

Stockholders' Equity

Total Current Assets

Property, Plant and Equipment

Total Current Liabilities

Long-term Investments

Total Liabilities and Stockholders' Equity

Total Long-term Investments

Total Stockholders' Equity

Non-current Assets

Other Assets

Current Assets

Current Liabilities

Noncurrent Liabilities

$