Reference no: EM132892275

Question - The Following information is taken from ABC Company's 2019 financial records:

Pretax accounting income = 1,500,000

Accrued warranty expense in excess of actual warranty expenditures = 24,500

Excess tax depreciation = (45,000)

Taxable Income = 1,479,500

The Temporary Differences were created entirely in 2019. The future deductible amount is expected to reverse in 2020 and the future taxable amount will reverse in equal amounts in the next 3 years.

Tax rates are: 30% in 2019; 32% in 2020; 34% in 2021 and 35% in 2022.

Required -

1. How much deferred tax asset must ABC report as of December 31, 2019?

2. How much deferred tax liability must ABC report as of December 31, 2019?

3. How much deferred tax liability must ABC report as of December 31, 2020?