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Smoothing Sailing Inc. records warranty expense for financial reporting purposes based on an estimated calculation but must use actual cost incurred for tax purposes. At
Smoothing Sailing Inc. records warranty expense for financial reporting purposes based on an estimated calculation but must use actual cost incurred for tax purposes. At December 31, 2019 Smoothing Sailings estimate of its future warranty exposure resulted in a temporary difference of $2,500,000. At the end of 2018 Smoothing Sailing had $1,200,000 recorded as a Deferred Tax Asset related to these warranty costs. Smoothing Sailings tax rate is 40%. What is the ending balance in the Deferred Tax Asset T-Account at 12/31/2019?
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