Q.30 Relix, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Based on this information,determine Relixs net deferred tax asset or net deferred tax liability at year-end. Assume a 34% corporate tax rate and no valuation allowance.

Tax Debit/ (Credit) Book Debit/ (Credit)

Assets

Cash $ 500 $ 500

Accounts receivable 8,000 8,000

Buildings 750,000 750,000

Accumulated depreciation (450,000) (380,000)

Furniture & fixtures 70,000 70,000

Accumulated depreciation (46,000) (38,000)

Total assets $ 332,500 $ 410,500

Liabilities

Accrued litigation expense $ 0 ($ 50,000)

Note payable (78,000) (78,000)

Total liabilities ($ 78,000) ($ 128,000)

Stockholders Equity

Paid-in capital ($ 10,000) ($ 10,000)

Retained earnings (244,500) (272,500)

Total liabilities and stockholders equity ($ 332,500) ($ 410,500)

Q.31 based on the facts and results of Problem 30 and the Beginning-of-the-year Book tax basis differences listed below, determine the change in Relix's Deferred tax assets tor the current year. Beginning year

Accrued litigation expense $34,000

Applicable tax rate 21% Gross deferred tax asset $7,140

32. Based on the facts and results of problem 30 and the beginning=of-the-year book tax basis differences listed below, determine the change in Relixs deferred tax liabilities for the current year.

Building-accumulated depreciation ($57,000)

Furniture & Fixtures-accumulated depreciation (4,200)

Subtotal ($61,200)

Applicable tax rate * 21%

Dross deferred tax liability ($12,852)