Does anybody know what the heck is going on with this question? Can you please explain it?

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Problem 11 [DTD warranty-inverted] ABC's tax accounting methods and GAAP accounting methods are the same except for the method used to account for the warranty liability for defective products. Per GAAP, ABC recognizes the warranty liability under the accrual basis of accounting as that obligation is incurred (i.e., debit warranty expense, credit warranty liability). Per tax rules, ABC deducts warranty expense on its tax return as warranty claims are paid. In other words, warranty is expense is recognized on the accrual basis for GAAP and the cash basis for tax. ABC reports pretax GAAP earnings of $100,000 for the 12 months ended December 31, 2020. ABC's warranty liability (relating to accrued warranty expense) was $30,000 at December 31, 2020. Embedded in pretax GAAP earnings is interest revenue of $2,000 earned on bonds issued by the State of Texas. ABC's December 31, 2019 balance sheet showed a deferred tax asset in the amount of $8,400 pertaining to the deductible temporary difference that stems from the GAAP/tax difference in the accounting for the warranty liability. Required 1. Prepare the entries needed to record current and deferred income taxes at December 31, 2020. Assume a 21% corporate tax rate. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 1 1 1 1 1 1 Enter your answer to the following question in the green box What amount of net income will be reported on the 2020 income statement? 2 Deferred income tax asset (Bal. Sht) Deferred income tax asset valuation allowance (Bal. Sht) Deferred income tax liability (Bal.Sht) Income tax payable (Bal.Sht) Liability for uncertain tax position (Bal. Sht) Income tax expense (Inc. Stmt) Problem 11 [DTD warranty-inverted] ABC's tax accounting methods and GAAP accounting methods are the same except for the method used to account for the warranty liability for defective products. Per GAAP, ABC recognizes the warranty liability under the accrual basis of accounting as that obligation is incurred (i.e., debit warranty expense, credit warranty liability). Per tax rules, ABC deducts warranty expense on its tax return as warranty claims are paid. In other words, warranty is expense is recognized on the accrual basis for GAAP and the cash basis for tax. ABC reports pretax GAAP earnings of $100,000 for the 12 months ended December 31, 2020. ABC's warranty liability (relating to accrued warranty expense) was $30,000 at December 31, 2020. Embedded in pretax GAAP earnings is interest revenue of $2,000 earned on bonds issued by the State of Texas. ABC's December 31, 2019 balance sheet showed a deferred tax asset in the amount of $8,400 pertaining to the deductible temporary difference that stems from the GAAP/tax difference in the accounting for the warranty liability. Required 1. Prepare the entries needed to record current and deferred income taxes at December 31, 2020. Assume a 21% corporate tax rate. Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box. Account Debit Credit 1 1 1 1 1 1 Enter your answer to the following question in the green box What amount of net income will be reported on the 2020 income statement? 2 Deferred income tax asset (Bal. Sht) Deferred income tax asset valuation allowance (Bal. Sht) Deferred income tax liability (Bal.Sht) Income tax payable (Bal.Sht) Liability for uncertain tax position (Bal. Sht) Income tax expense (Inc. Stmt)