At December 31, 2008, Deep Space Nine Corporation had an estimated warranty liability of $125,000 for accounting

Question:

At December 31, 2008, Deep Space Nine Corporation had an estimated warranty liability of $125,000 for accounting purposes and $0 for tax purposes. (The warranty costs are not deductible until paid.) The effective tax rate is 40%. Compute the amount Deep Space Nine should report as a deferred tax asset at December 31, 2008.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...