eBook Exercise 14-22 (Algorithmic) (LO. 1, 4) Ovate, Inc., earns $226,500 in book income before tax and is subject to a 21% marginal Federal income tax rate in its first year of operations. Ovate estimates it will incur $7,200 over the next two years to honor warranties on products it sold during the current year and recorded the appropriate liability on its balance sheet at the end of the year. a. Determine the amount of Ovate's deferred tax assets and liabilities, if any, as of the end of the year. The liability for future warranty expenses recorded on the books will make the net book value of Ovate's liabilities $7,200greater than their tax adjusted bases, creating a temporary book-tax difference of $ and a deferred tax asset of $ b. Express your computation as a Microsoft Excel formula. DEFTAX=((BEGBOOK-BEGTAX)-(ENDBOOK-BEGTAX))*TAXRATE Feedback Check My Work An accounting method difference that causes current book and taxable income to differ will produce both a deferred tax asset or liability on the balance sheet and a deferred tax benefit or expense on the income statement