Turnip Company purchased an asset at a cost of $10,000 with a 10-year life during the current year. Turnip uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is $1,000 and for income tax purposes is $2,000. Turnip is subject to a 30% enacted future tax rate.

Hide

Prepare a schedule to compute Turnip's (a) ending future taxable amount, (b) ending deferred tax liability, and (c) change in deferred tax liability (deferred tax expense) for the current year. If an amount is zero, enter "0".

TURNIP COMPANY

Tax Computations

(a) Ending future taxable amount

$

Enacted future tax rate (%)

%

(b) Ending deferred tax liability

$

Beginning deferred tax liability

(c) Change (increase) in deferred tax liabilit

$