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Blossom Company began operations at the beginning of 2021. The following information pertains to this company. 1. 2. 3. Pretax financial income for 2021 is $111.000. The tax rate enacted for 2021 and future years is 20%. Differences between the 2021 income statement and tax return are listed below: (a) Warranty expense accrued for financial reporting purposes amounts to $7,300. Warranty deductions per the tax return amount to $2,200. (b) Gross profit on construction contracts using the percentage-of-completion method per books amounts to $90,100. Gross profit on construction contracts for tax purposes amounts to $65,300. (c) Depreciation of property, plant, and equipment for financial reporting purposes amounts to $61,800. Depreciation of these assets amounts to $76,700 for the tax return. (d) A $3,400 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,300. 4 Taxable income is expected for the next few years. (Assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) (a) Your answer is correct. Compute taxable income for 2021. Taxable income for 2021 $ 78500 Taxable income for 2021 $ 78500 eTextbook and Media List of Accounts Attempts: 1 of 2 used Using multiple attempts will impact your score. 5% score reduction after attempt 1 (b) * Your answer is incorrect. Compute the deferred taxes at December 31, 2021, that relate to the temporary differences described above. Deferred tax liability $ $ 1020 Deferred tax asset $ $ 7940

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