PLEASE FIND ALL OF THE THE DEFERRED TAX ASSETS, DEFERRED TAX LIABILITIES, DEFERRED TAX EXPENSE, CURRENT TAX EXPENSE BASED ON THE FOLLOWING INFORMATION

• Assume that $40,000 of the $60,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations $50,000 of the meals and entertainment expenses will be disallowed for tax purposes. Also assume that COVID-19 related legislation does not apply in this situation.
• Depreciation for tax purposes is $2.45 million under MACRS. Accumulated depreciation for tax purposes was $1.4 million at the beginning of 2021. Because a difference of $600,000 between tax and book accumulated depreciation existed at the beginning of the year, a deferred tax liability existed at the beginning of 2021.
• Bad debt expense for tax purposes is $425,000 under the direct write-off method. A deferred tax asset existed because of the allowance for doubtful accounts at the beginning of the year.
• At the beginning of 2021, there was a net operating loss of $865,000 from a previous year creating a deferred tax asset. Because there was sufficient income to use the NOL in 2021 the entire NOL will be used in 2021.
• At the beginning of 2021 there was a charitable contribution carryover of $100,000 from a previous year creating a deferred tax asset. Because there was sufficient income to use the charitable contribution carryover in 2021 the entire carryover will be used in the current year.
• The investment in corporate stock is comprised of less-than-20%-owned corporations.
• The corporate tax rate in 2020 and 2021 is 21%.

Assets Cash Accounts Receivable Allowance for doubtful accounts Inventory Net deferred tax asset Fixed Assets Accumulated Depreciation Investment in corporate stock Investment in tax exempt bonds Liabilities Accounts Payable Federal income tax liability Net deferred tax liability Long-term debt Owner's Equity Common stock Retained earnings Total Assets Total Liabilities Total Owner's Equity Total Liabilties and Equity 12/31/20 $ 1,400,000 $ 2,000,000 $ (250,000) $ 1,750,000 $ 3,100,000 $ 129,150 $10,000,000 $ (800,000) $ $ 9,200,000 1,000,000 50,000 $ $ 16,629,150 $ 2,610,000 $ $ $ 8,500,000 $ 11,110,000 $ 6,000,000 $ (480,850) $ 5,519,150 $ 16,629,150 12/31/2021 (Unadjusted) $ 2,625,000 $ 3,300,000 $ (450,000) $ 2,850,000 $ 5,100,000 $ 129,150 $ 10,000,000 $ (1,600,000) $ 8,400,000 $ 1,000,000 $ 450,000 $ 20,554,150 $ 2,120,000 $ $ $ 8,500,000 $ 10,620,000 $ 6,000,000 $ 3,934,150 $ 9,934,150 $ 20,554,150 Sales Cost of goods sold Gross profit Dividend income Tax-exempt interest income Total income Expenses: Depreciation Bad Debts Charitable contributions Interest Meals and entertainment Other Total Expenses Net Income before federal income taxes $ es $ $ es es es es $ $ $ 800,000 625,000 40,000 455,000 60,000 3,295,000 $ 28,000,000 $ (18,500,000) $ 9,500,000 $ 55,000 $ 135,000 $ 9,690,000 $ (5,275,000) $ 4,415,000 Book Income GAAP Assets Cash Accounts Receivable Allowance for doubtful accounts Inventory Net deferred tax asset Fixed Assets Accumulated Depreciation Investment in corporate stock Investment in tax exempt bonds Liabilities Accounts Payable Federal income tax liability Net deferred tax liability Long-term debt Owner's Equity Common stock Retained earnings Total Assets Total Liabilities Total Owner's Equity Total Liabilties and Equity 12/31/20 $ 1,400,000 $ 2,000,000 $ (250,000) $ 1,750,000 $ 3,100,000 $ 129,150 $10,000,000 $ (800,000) $ $ 9,200,000 1,000,000 50,000 $ $ 16,629,150 $ 2,610,000 $ $ $ 8,500,000 $ 11,110,000 $ 6,000,000 $ (480,850) $ 5,519,150 $ 16,629,150 12/31/2021 (Unadjusted) $ 2,625,000 $ 3,300,000 $ (450,000) $ 2,850,000 $ 5,100,000 $ 129,150 $ 10,000,000 $ (1,600,000) $ 8,400,000 $ 1,000,000 $ 450,000 $ 20,554,150 $ 2,120,000 $ $ $ 8,500,000 $ 10,620,000 $ 6,000,000 $ 3,934,150 $ 9,934,150 $ 20,554,150 Sales Cost of goods sold Gross profit Dividend income Tax-exempt interest income Total income Expenses: Depreciation Bad Debts Charitable contributions Interest Meals and entertainment Other Total Expenses Net Income before federal income taxes $ es $ $ es es es es $ $ $ 800,000 625,000 40,000 455,000 60,000 3,295,000 $ 28,000,000 $ (18,500,000) $ 9,500,000 $ 55,000 $ 135,000 $ 9,690,000 $ (5,275,000) $ 4,415,000 Book Income GAAP