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Taylor Company began manufacturing operations on January 2, 2015.
During 2015 Taylor earned pre-tax book income of $150,000 and had taxable
income of $200,000.
Taylor had a temporary difference relating to accrued product warranty
costs that are expected to be paid as follows:
2016 $ 30,000
2017 $ 15,000
2018 $ 5,000
The enacted tax rates are 30% for 2015 and 2016; and 40% for 2017 and 2018. The deferred tax asset at the end of 2015 is?
$17,000.
$12,000.
$20,000.
$9,000.
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