Problem 3-40 (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 liabilities are listed below. Complete the table and determine the change in Kantner's deferred tax liabilities for the current year.

		Beginning of Year			Current-Year Difference				End of Year
Buildingaccumulated depreciation		($62,000)				$			$
Furniture and fixtures
	accumulated depreciation	(400)				$			$
Subtotal		($62,400)				$			$
Applicable tax rate		21%				21%			21%
Gross deferred tax liability		($13,104)							$
Change in deferred tax liability						$