Deferred Tax Asset wala pogoneset lented Lofthouse Machinery Co. includes a two-year warranty on its machinery sales. At the end of 2015, an analy- sis of the warranty records reveals an accumulated temporary difference of $120,000 for warranty expens- es; book expenses related to warranties have exceeded tax deductions allowed. The enacted income tax rate for 2015 and future years is 40%. Management concludes that it is more likely than not that Lofthouse will have future income to realize the future tax benefit from this temporary difference. They also conclude that 20% of the warranty liability is current and 80% is noncurrent. 1. How would the deferred tax information be reported on the Lofthouse balance sheet at December 31, 2015? 2. If management assumed that only 70% of the tax benefit from the temporary difference could be realized, how would the deferred tax information be reported on the balance sheet at December 31, 2015? (Recall that the valuation allowance is allocated proportionately between the current and noncurrent portions of the deferred tax asset.) Han