In year 1, Rand, Inc. reported for financial statement purposes the following items, which were not included

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Question:

In year 1, Rand, Inc. reported for financial statement purposes
the following items, which were not included in taxable
income:

Installment gain to be collected equally in
year 2 through year 4 $1,500,000

Estimated future warranty costs to be paid
equally in year 2 through year 4 2,100,000

There were no temporary differences in prior years. Rand?s
enacted tax rates are 30% for year 1 and 25% for year 2 through
year 4.

In Rand?s December 31, year 1 balance sheet, what amounts
of the deferred tax asset should be classified as current and noncurrent?

Current
Noncurrent

$60,000 $100,000
$60,000 $120,000
$50,000 $100,000
$50,000 $120,000