Ivanhoe inc. has two temporary differences at the end of 2016. 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. 2017 2018 2019 2020 taxable amounts $39,300 $54,800 $58,300 $83,700 deductible amounts (16,200 ) (19,700 ) $39,300 $38,600 $38,600 $83,700 as of the beginning of 2016, the enacted tax rate is 34% for 2016 and 2017, and 38% for 2018–2021. at the beginning of 2016, the company had no deferred income taxes on its balance sheet. taxable income for 2016 is $493,000. taxable income is expected in all future years. prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016.

Kandon enterprises, inc., has two operating divisions; one manufactures machinery and the other breeds and sells horses. both divisions are considered separate components as defined by generally accepted accounting principles. the horse division has been unprofitable, and on november 15, 2018, kandon adopted a formal plan to sell the division. the sale was completed on april 30, 2019. at december 31, 2018, the component was considered held for sale. on december 31, 2018, the company’s fiscal year-end, the book value of the assets of the horse division was $415,000. on that date, the fair value of the assets, less costs to sell, was $350,000. the before-tax loss from operations of the division for the year was $290,000. the company’s effective tax rate is 40%. the after-tax income from continuing operations for 2018 was $550,000. required: 1. prepare a partial income statement for 2018 beginning with income from continuing operations. ignore eps disclosures. 2. prepare a partial income statement for 2018 beginning with income from continuing operations. assuming that the estimated net fair value of the horse division’s assets was $700,000, instead of $350,000. ignore eps disclosures.