Your firm has $90,000 in income before taxes, and taxable income of $80,000 for 2023. The...

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Your firm has $90,000 in income before taxes, and taxable income of $80,000 for 2023. The difference between the two incomes is attributable to only the following two items: Accelerated depreciation on PP&E was $26,000 for tax purposes but was $42,000 for GAAP reporting purposes in 2023. Your firm also recorded warranty expense under GAAP and as a tax deductible expense at different amounts in 2023. There are no other differences between the two incomes. The firm's tax rate is 25%. a) How much was the difference between the GAAP warranty expense and the tax warranty expense in 2023? Find the amount and indicate whether the GAAP warranty expense was greater or less than the tax warranty expense. b) By how much did the firm's deferred tax assets and liabilities change in 2023? Make sure to label the amounts as changes in deferred tax assets and liabilities, respectively. Your firm has $90,000 in income before taxes, and taxable income of $80,000 for 2023. The difference between the two incomes is attributable to only the following two items: Accelerated depreciation on PP&E was $26,000 for tax purposes but was $42,000 for GAAP reporting purposes in 2023. Your firm also recorded warranty expense under GAAP and as a tax deductible expense at different amounts in 2023. There are no other differences between the two incomes. The firm's tax rate is 25%. a) How much was the difference between the GAAP warranty expense and the tax warranty expense in 2023? Find the amount and indicate whether the GAAP warranty expense was greater or less than the tax warranty expense. b) By how much did the firm's deferred tax assets and liabilities change in 2023? Make sure to label the amounts as changes in deferred tax assets and liabilities, respectively.

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a To determine the difference between the GAAP warranty expense and the tax warranty expense in 2023 ... View the full answer