21. LO.1, 4 Ovate, Inc., earns $140,000 in book income before tax and is subject to a 21% marginal Federal income tax rate in its first year of operations. Ovate estimates it will incur $6,000 over the next two years to honor warranties on products it sold during the current year and recorded the appropriate liability on its balance sheet at the end of the year.

a. Determine the amount of Ovate’s deferred tax assets and liabilities, if any, as of the end of the year.

b. Express your computation as a Microsoft Excel formula.