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Determine the deferred income tax expense

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Question - SAB Ltd. provided you with the following information about its financial statements and income tax return for the year ending December 31, 20X1, the company's first year of operations:

Net income before income tax (NIBT) = 900,000

Warranty expense in 20X1 = 65,000

Warranty payments in 20X1 = 54,000

Non-taxable income in 20X1 (this income is never taxable) = 30,000

Current income tax rate = 30%

Future income tax rate (enacted before the end of the year) = 35%

Required -

1: Determine the current income tax expense for the year ended December 31, 20X1.

2: Determine the deferred income tax expense or benefit for the year - if the amount is a benefit please put brackets around it and if it is an expense please do not use brackets.

3: Determine the carrying amount of the warranty liability on December 31, 20X1 (please do not bracket your answer).

Reference no: EM132869027

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