Question

Exercise 19-8 (Part Level Submission)

Riverbed Company has the following two temporary differences between its income tax expense and income taxes payable.

2017

2018

2019

Pretax financial income

$873,000

$866,000

$947,000

Excess depreciation expense on tax return

(29,400

)

(39,000

)

(9,600

)

Excess warranty expense in financial income

20,000

9,900

8,300

Taxable income

$863,600

$836,900

$945,700

The income tax rate for all years is 40%.

Collapse question part

(a)

Correct answer. Your answer is correct.

Assuming there were no temporary differences prior to 2017, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 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.)

Account Titles and Explanation

Debit

Credit

2017

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

2018

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

2019

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

SHOW LIST OF ACCOUNTS

SHOW SOLUTION

SHOW ANSWER

LINK TO TEXT

LINK TO TEXT

By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor.

Attempts: 2 of 3 used

Collapse question part

(b)

Partially correct answer. Your answer is partially correct. Try again.

Indicate how deferred taxes will be reported on the 2019 balance sheet. Riverbed’s product warranty is for 12 months.

Riverbed Company

Balance Sheet

Entry field with correct answer

Entry field with correct answer

Entry field with correct answer

$Entry field with incorrect answer

LINK TO TEXT

Answer 1

a)
Date	Account Titles and Explanation	Debit	Credit
2017	Income Tax Expense	$    349,200.00
	Deferred Tax Asset	$        8,000.00
	Deferred Tax Liability		$   11,760.00
	Income Taxes Payable		$ 345,440.00
2018	Income Tax Expense	$    346,400.00
	Deferred Tax Asset	$        3,960.00
	Deferred Tax Liability		$   15,600.00
	Income Taxes Payable		$ 334,760.00
2019	Income Tax Expense	$    378,800.00
	Deferred Tax Asset	$        3,320.00
	Deferred Tax Liability		$     3,840.00
	Income Taxes Payable		$ 378,280.00
Indicate how deferred taxes will be reported on the 2019 balance sheet. Riverbed’s product warranty is for 12 months.
Riverbed Company
Balance Sheet
Current Assets
Deferred tax asset	$                                                                15,280.00
Long-term liabilities
Deferred tax liability	$                                                                31,200.00

Pretax financial income 4 2017 873000 5 2018 866000 6 2019 947000 7 Assuming there were no temporary differences prior to 2 Excess depreciation expense on tax return -29400 -39000 -9600 Excess warranty expense in financial income 20000 9900 8300 Taxable income 863600 836900 945700 9 a) 10 Date 11 2017 Credit Account Titles and Explanation Income Tax Expense Deferred Tax Asset Deferred Tax Liability Income Taxes Payable Debit =D13+D14-C12 =D4*40% --C440% =E4*40% 16 2018 =D18+D19-C17 =D5*40% Income Tax Expense Deferred Tax Asset Deferred Tax Liability Income Taxes Payable --C540% =E5*40% 21 2019 =D23+D24-C22 =D6*40% Income Tax Expense Deferred Tax Asset Deferred Tax Liability Income Taxes Payable --C6 40% =E6*40% 26 Indicate how deferred taxes will be reported on the 2015 27 Riverbed Company 28 Balance Sheet 29 Current Assets 30 Deferred tax asset =C12+C17+C22 31 Long-term liabilities 32 Deferred tax liability =D13+D18+D23