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Exercise 19-9 At December 31, 2016, Indigo Company had a net deferred tax liability of...

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Exercise 19-9 At December 31, 2016, Indigo Company had a net deferred tax liability of $381,200. An explanation of the items that compose this baliance is as Resulting Balances in Deferred Taxes Temporary Differences 1. Excess of tax depreciation over book depreciation $193,300 2. Accrual, for book purposes, of estimated loss contingency from pending lawsult that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. (53,200) 241,100 $381,200 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. rence will reverse in 2017, and $128,800 of the temporary difference due to the installment sale will reverse in 2017. The tax rate for all years is 40%. Indicate the manner in which deferred taxes should be presented on Indigo Company's December 31, 2016, balance sheet. Indigo Company's Balance Sheet

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