PLZ READ: THIS QUESTION IS ANSWERED. I JUST NEED CLARIFICATION HOW IS THE TAX BASIS OF THE WARRANTY 0 FOR YEAR 1 AND 2. WOULD IT NOT BE THE EXESE OF 10,000 IN YEAR 1 AND 20,000 IN YEAR 2?

Prepare a schedule to compute the Deferred Tax Asset balance on Dec. 31 of Year 1 and Year 2. Assume a zero-beginning balance in the Deferred Tax Asset account on Jan. 1 of Year 1.

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Aspen Inc. estimates assurance-type warranty costs of $30,000 related to Year 1 sales. During the year, $10,000 warranty costs are incurred. On December 31 of Year 1, Aspen Inc. recorded a warranty accrual (debit Warranty Expense and credit Warranty Liability) for future estimated claims of $20,000($30,000$10,000). For tax purposes, however, only the $10,000 of actual warranty costs is deductible. Assume that the $20,000 of claims results in actual costs in Year 2. The records of Aspen Inc. show the following