Refer to Practice 20-2. Assume that before 2011 the company used straight-line depreciation for tax purposes while using double-declining-balance depreciation for book purposes. The change to straight-line depreciation in 2011 is made for book purposes; the company continues to use straight-line depreciation for tax purposes. The income tax rate is 40%.
(1) Compute the amount of the deferred tax asset or liability that would be included in the December 31, 2010, balance sheet and
(2) Compute the amount of the deferred tax asset or liability that would be included in the December 31, 2011, balance sheet.