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.