Problem 3-39 (LO. 2)

Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% Federal corporate tax rate and no valuation allowance.

		Tax Debit/(Credit)			Book Debit/(Credit)
Assets
Cash		$1,000			$1,000
Accounts receivable		9,000			9,000
Buildings		850,000			850,000
	Accumulated depreciation	(700,000)			(620,000)
Furniture and fixtures		40,000			40,000
	Accumulated depreciation	(10,000)			(8,000)
Total assets		$190,000			$272,000
Liabilities
Accrued warranty expense		$0			($40,000)
Note payable		(16,000)			(16,000)
Total liabilities		($16,000)			($56,000)
Stockholders' Equity
Paid-in capital		($50,000)			($50,000)
Retained earnings		(124,000)			(166,000)
Total liabilities and stockholders' equity		($190,000)			($272,000)

The beginning of the year book-tax basis difference for the deferred tax asset is listed below. Complete the table and determine the change in Kantner's deferred tax assets for the current year.

	Beginning of Year			Current-Year Difference			End of Year
Accrued warranty expense	$30,000			$			$
Applicable tax rate	21%			21%			21%
Gross deferred tax asset	$6,300						$
Change in deferred tax asset				$