Klerk Company had four temporary differences between its pretax financial income and its taxable income during $2019$ as follows:

Number

Temporary Difference

$1$ Gross profit on certain sales is recognized under the accrual method for financial reporting and under the cash$-$basis method for income taxes.

$2$ MACRS depreciation is used for income taxes; a different depreciation method is used for financial reporting.

$3$ Rent receipts are included in taxable income when collected in advance; rent revenue is recognized under the accrual method for financial reporting.

$4$ Warranty expense is estimated for financial reporting; warranty costs are deducted as incurred for income taxes.

At the beginning of $2019,$ Klerk had a deferred tax liability of $$84,300$ related to Temporary Difference #$2$ and a deferred tax asset of $$21,090$ related to Temporary Difference #$4.$ Based on its tax records, Klerk earned taxable income of $$270,000$ for $2019.$ Kerk$$s accountant has prepared the following schedule showing the total future taxable and deductible amounts at the end of $2019$ for its four temporary differences:

Future Taxable Amounts

Future Deductible Amounts

#$1$ #$2$ #$3$ #$4$

$$77,900$ $$241,000$ $$20,000$ $$55,300$

The company has a history of earning income and expects to be profitable in the future. The income tax rate for $2019$ is $40\%,$ but in $2018$ Congress enacted a $30\%$ tax rate for $2020$ and future years.

During $2019,$ for financial accounting purposes, Klerk reported revenues of $$750,000$ and expenses of $$447,100.$ The deferred taxes related to Temporary Differences #$1,$ #$2,$ and #$4$ are considered to be noncurrent by the company; the deferred tax related to Temporary Difference #$3$ is considered to be current.

Required:

$1.$ Prepare Klerk$$s income tax journal entry for $2019.$

$2.$ Prepare a condensed $2019$ income statement for Klerk.

$3.$ Show how the income tax items are reported on Klerk$$s December $31,2019,$ balance sheet.