Olong Ltd. started operations in 20X6. The company provided the following information for its warranty balances for the past four years:

	20x6	20x7	20x8	20x9
Warranty Cost Accrued	25,000	20,000	27,500	40,000
Cost incurred - warranty work	22,500	17,500	30,000	27,500
Cost incurred - development costs	45,000	50,000	60,000	25,000
Amortization - - development costs	0	9,000	19,000	25,000
Tax Rate	40%	38%	38%	36%

Required:

1. What is the tax basis for development costs and the provision for warranty costs in each year?
2. What is the accounting basis for development costs and the provision for warranty costs in each year
3. What is the deferred tax balance in each year?
4. Is the balance an asset or a liability?