The corporate tax rate is 21%

Problem P15 Facts: ABC's tax accounting methods and GAAP accounting methods are the same except for the following: 1. The method used to account for earned but uncollected service revenues (i.e., accounting for accounts receivables); 2. The method used to account for the warranty liability for defective products; 3. The method used to account for depreciation expense on property and equipment; and 4. The method used to account for advance payments from customers (i.e., accounting for the deferred revenue liability). For GAAP, ABC accrues uncollected service revenues (debit accounts receivable, credit sales revenue): recognizes a warranty liability under the accrual basis of accounting as that obligation is incurred; recognizes depreciation expense over the economic life of the asset using the straight-line method; and defers recognition of advance payments from customers (debit cash, credit deferred revenue), recognizing the revenue as it satisfies the performance obligation (debit deferred revenue, credit revenue). For tax ABC is taxed on earned but uncollected service revenues when the customer pays on account, deducts warranty expense on its tax return as warranty claims are paid, recognizes depreciation expense using the MACRS system, and is taxed on advance payments from customers when received without regard to whether the performance obligation has been satisfied. ABC's accounts receivable (relating to accrued service revenues) was $300,000 at December 31, 2019 and $330,000 at December 31, 2020. The warranty liability (relating to accrued warranty expense) was $900,000 at December 31, 2019 and $855,000 at December 31, 2020. Accumulated depreciation for GAAP was $300,000 at December 31, 2019 and $330,000 at December 31, 2020. Tax-method accumulated depreciation was $390,000 at December 31, 2019 and $418,500 at December 31, 2020. The balance in the deferred revenue liability (relating to advance payments from customers) was $500,000 at December 31, 2019 and $400,000 at December 31, 2020. ABC reports pretax GAAP earnings of $4,000,000 for the 12 months ended December 31, 2020. Embedded in pretax GAAP earnings is interest revenue of $0 earned on bonds issued by the State of Texas; a $10,000 fine paid to the EPA: and $11,000 of insurance expense on premiums paid for a life insurance policy on the CEO for which the company is beneficiary. ABC reported a deferred tax liability of $63,000 at December 31, 2019 relating to the book/tax difference in method of accounting for accounts receivables. ABC reported a deferred tax asset of $189,000 at December 31, 2019 relating to the book/tax difference in method of accounting for the warranty liability. ABC reported a deferred tax liability of $18.900 at December 31, 2019 relating to the book/tax difference in method of accounting for depreciation on property and equipment. ABC reported a deferred tax asset of $105,000 at December 31, 2019 relating to the book/tax difference in method of accounting for the deferred revenue liability. Assume no purchases or sales of property and equipment during 2020. Required: 61. Determine the amount of 2020 current federal income tax expense 62. Determine the amount of 2020 deferred federal income tax expense. 63. Determine the 12/31/2020 balance in the deferred tax asset account. 64. Determine the 12/31/2020 balance in the deferred tax liability account 65. Determine the amount of 2020 GAAP net income. Problem P15 Facts: ABC's tax accounting methods and GAAP accounting methods are the same except for the following: 1. The method used to account for earned but uncollected service revenues (i.e., accounting for accounts receivables); 2. The method used to account for the warranty liability for defective products; 3. The method used to account for depreciation expense on property and equipment; and 4. The method used to account for advance payments from customers (i.e., accounting for the deferred revenue liability). For GAAP, ABC accrues uncollected service revenues (debit accounts receivable, credit sales revenue): recognizes a warranty liability under the accrual basis of accounting as that obligation is incurred; recognizes depreciation expense over the economic life of the asset using the straight-line method; and defers recognition of advance payments from customers (debit cash, credit deferred revenue), recognizing the revenue as it satisfies the performance obligation (debit deferred revenue, credit revenue). For tax ABC is taxed on earned but uncollected service revenues when the customer pays on account, deducts warranty expense on its tax return as warranty claims are paid, recognizes depreciation expense using the MACRS system, and is taxed on advance payments from customers when received without regard to whether the performance obligation has been satisfied. ABC's accounts receivable (relating to accrued service revenues) was $300,000 at December 31, 2019 and $330,000 at December 31, 2020. The warranty liability (relating to accrued warranty expense) was $900,000 at December 31, 2019 and $855,000 at December 31, 2020. Accumulated depreciation for GAAP was $300,000 at December 31, 2019 and $330,000 at December 31, 2020. Tax-method accumulated depreciation was $390,000 at December 31, 2019 and $418,500 at December 31, 2020. The balance in the deferred revenue liability (relating to advance payments from customers) was $500,000 at December 31, 2019 and $400,000 at December 31, 2020. ABC reports pretax GAAP earnings of $4,000,000 for the 12 months ended December 31, 2020. Embedded in pretax GAAP earnings is interest revenue of $0 earned on bonds issued by the State of Texas; a $10,000 fine paid to the EPA: and $11,000 of insurance expense on premiums paid for a life insurance policy on the CEO for which the company is beneficiary. ABC reported a deferred tax liability of $63,000 at December 31, 2019 relating to the book/tax difference in method of accounting for accounts receivables. ABC reported a deferred tax asset of $189,000 at December 31, 2019 relating to the book/tax difference in method of accounting for the warranty liability. ABC reported a deferred tax liability of $18.900 at December 31, 2019 relating to the book/tax difference in method of accounting for depreciation on property and equipment. ABC reported a deferred tax asset of $105,000 at December 31, 2019 relating to the book/tax difference in method of accounting for the deferred revenue liability. Assume no purchases or sales of property and equipment during 2020. Required: 61. Determine the amount of 2020 current federal income tax expense 62. Determine the amount of 2020 deferred federal income tax expense. 63. Determine the 12/31/2020 balance in the deferred tax asset account. 64. Determine the 12/31/2020 balance in the deferred tax liability account 65. Determine the amount of 2020 GAAP net income