(One Reversing Difference, Future Deductible Amounts, No Beginning

Deferred Taxes, Change in Rate)

(LO

2

,

3

,

4

,

5

)

Use the information for Jenny Corporation in

E18.16

. Assume that the

company reports accounting income of $155,000 in each of 2021 and 2022, and that

there is no reversing difference other than the one identified in

E18.16

. In addition,

assume now that Jenny Corporation was informed on December 31, 2021, that the

enacted rate for 2022 and subsequent years is 28%.

Instructions

a.

Calculate the deferred tax balances at December 31, 2021 and 2022.

b.

Calculate taxable income and income tax payable for 2021 and 2022.

c.

Prepare the journal entries to record income taxes for 2021 and 2022.

d.

Prepare the income tax expense section of the income statements for 2021 and 2022,

beginning with the line "Income before income tax."