Accounting Federal Tax

Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% Federal corporate tax rate and no valuation allowance. Tax Book Debit/(Credit) Debit/Credit) Assets Cash $1,000 $1,000 Accounts receivable 9,000 Buildings Accumulated depreciation 850,000 (700,000) 40,000 (10,000) 9,000 850,000 (620,000) 40,000 Furniture and fixtures Accumulated depreciation (8,000) Total assets $190,000 $272,000 Liabilities Accrued warranty expense $0 ($40,000) Note payable (16,000) (16,000) Total liabilities ($16,000) ($56,000) Stockholders' Equity Paid-in capital ($50,000) ($50,000) Retained earnings (124,000) (166,000) Total liabilities and stockholders' equity ($190,000) ($272,000) The partial beginning of the year tax and book balance sheet information is provided below. Complete the table and determine Kantner's deferred tax benefit or expense for the current year. Tax Net Book Combined Deferred Tax Temporary Difference Adjusted Basis Value Tax Rate Asset/(Liability) Accumulated depreciation-Building $600,000 $662,000 $ 62,000 21% $ 13,020 Accumulated depreciation-Furniture & fixtures 4,000 4,400 400 21% 84 Accrued warranty expense 30,000 0 30,000 21% 6,300 Net deferred tax liability 6,804 Provide the journal entry necessary to record this amount. JOURNAL DATE Description Post. Ref. Debit Credit Income tax expense (provision) 6,300 X Deferred tax liability 6,300 X