Please make the response detailed and easy to read, thank you Calculating Deferred Tax Asset...
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Calculating Deferred Tax Asset Balance
On December 31, 2020, Delta Inc. recorded $28,000 of deferred revenue (a liability) on customer deposits received in advance of the satisfaction of performance obligations. However, this amount is taxable in 2020 when cash was received. Assume a tax rate of 25% and pretax GAAP income of $160,000 for 2020.
a. Determine the GAAP basis of deferred revenue on December 31, 2020. Deferred Revenue (GAAP basis) $ 0 x b. Determine the tax basis of deferred revenue on December 31, 2020. Deferred Revenue (tax basis) $ c. Determine Delta Inc's deferred tax asset balance on December 31, 2020. Deferred tax asset balance $ 0 x
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