Aspen Inc. estimates assurance$-$type warranty costs of $$30,000$ related to Year $1$ sales. During the

year, $$10,000$ warranty costs are incurred. On December $31$ of Year $1,$ Aspen Inc. recorded a

warranty accrual $($debit Warranty Expense and credit Warranty Liability$)$ for future estimated

claims of $$20,000($ $$30,000-$ $$10,000).$ For tax purposes, however, only the $$10,000$ of actual

warranty costs is deductible. Assume that the $$20,000$ of claims results in actual costs in Year $2.$

The records of Aspen inc. show the following:

Required:

a$.$ Compute the increase in income tax payable for Year $1$ and Year $2.$ Assume a tax rate of $25\%.$

b$.$ Prepare a schedule to compute the Deferred Tax Asset balance on December $31$ of Year $1$ and

Year $2.$ Assume a zero$-$beginning balance in the Deferred Tax Asset account on January $1$ of Year $1.$

c$.$ Record the income tax journal entry on December $31$ of Year $1.$

d$.$ Indicate the amounts included on the balance sheet on December $31$ of Year $1$ and on the Year

$1$ income statement. Indicate the disclosure of current and deferred tax expense. Classify all

deferred accounts as noncurrent on the balance sheet.

e$.$ Record the income tax journal entry on December $31$ of Year $2.$