Create a spreadsheet that will calculate a simple tax provision for a company. ABC Inc. is in its first year of operations and has only the following differences between pretax accounting income and taxable income: 1. Fixed assets, $300,000 historical cost, are depreciated straight-line over three years for the financial statements and are depreciated straight-line over two years for tax purposes. 2. Warranty expense of $80,000 is accrued for financial statement purposes, but the tax deduction isn't allowed until the warranty liabilities are paid/completed, which is expected to happen evenly over the following two years. 3. Municipal bond interest of $10,000 is received in the current year. Municipal bond interest of $12,000 is expected in the following year.

ABC has pretax accounting income of $200,000 in the first year. ABC has pretax accounting income of $250,000 in the second year. The statutory tax rate is 21%.

Create a Tax Provision, an acceptable calculation will include any deferred tax assets and liabilities, the income tax payable, the income tax expense and the effective tax rate.