Question

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Exercise 19-8 (Part Level Submission) Larkspur Company has the following two temporary differences between its income tax expense and income taxes payable 2017 2018 2019 Pretax financial income Excess depreciation expense on Excess Taxable income $844,000 $884,000 $948,000 (30,800) (40,000) (9,500) 9,900 tax return warranty expense in financial income 19,300 8,400 $832,500 $853,900 $946,900 The income tax rate for all years is 40% Your answer is correct. Assuming there were no temporary difterences prior to 2017, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable tor 2017, 2018, and 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.)

Answer 1

Larkspur Company
Balance sheet
December 31,2019
Non-current liabilities:
Deferred Tax Asset (7,720+3,960+3,360)	15,040
Deferred Tax Liability (12,320+16,000+3,800)	32,120
Deferred Tax Liability	17,080