Answer:
($3,528)
Explanation:
Calculation to determine Relix's net deferred tax asset or net deferred tax liability at year end.
Beginning of the Year Current year difference End of Year
Building-Accumulated depreciation
($57,000) ($13,000) ($70,000)
($57,000-$70,000=-$13,000)
Furniture and fixtures-Accumulated Depriciation ($4,200) ($3,800) ($8,000)
($4,200-$8,000=$3,800)
Subtotal ($61,200) ($16,800) ($78,000)
($57,000+$4,200=$61,200)
($13,000+$3,800=$16,800)
($70,000+$8,000=$78,000)
Applicable tax rate 21% 21% 21%
Gross deferred tax liability
($12,852) ($16,380)
(21%*$61,200=$12,852)
(21%*$78,000=$16,380)
Change in deferred tax liability ($3,528)
(21%*$16,380)
Therefore net deferred tax liability at year end is ($3,528)
