Velma, Inc. reported the following for 2020: Pretax book net income of $500,000 Tax depreciation in excess of book depreciation of 75,000 Warranty expense on the income statement, not deductible currently 17,500 Municipal bond income of 10,000

Assume a combined federal, state and foreign income tax of 25%.

1.Compute Velma's total income tax expense, current income tax expense, and deferred income tax expense.

2.What is the end-of-year balance in Velmas deferred tax asset and deferred tax liability balance sheet accounts?