Calculating Deferred Tax Asset Balance

On December 31, 2020, Delta Inc. recorded $84,000 of deferred revenue (a liability) on customer deposits received in advance of the satisfaction of performance obligations. However, this amount is taxable in 2020 when cash was received. Assume a tax rate of 25% and pretax GAAP income of $480,000 for 2020.

a. Determine the GAAP basis of deferred revenue on December 31, 2020.

Deferred Revenue (GAAP basis)

b. Determine the tax basis of deferred revenue on December 31, 2020.

Deferred Revenue (tax basis)

c. Determine Delta Inc's deferred tax asset balance on December 31, 2020