Answer: Please refer to Explanation
Explanation:
As per the US GAAP and IFRS, Deferred Tax Liabilities and Assets are not to be reported as Current Assets or Liabilities but rather as Non Current items.
Assets
Warranty Liability $57,400
Litigation Accruals $ 27,800
Total Deferred Tax Assets <u>$85,200</u>
Liabilities
Revenue Recognition $93,600
Depreciation $38,000
Total Deferred Tax Liabilities <u>$131,600</u>
Total Net Deferred Tax Liability <em><u>$46,400</u></em>
Total Net Deferred Tax Liability calculation
= $131,600 - $85,200
= $46,400
The above is how these balances would be presented in Sandhill’s December 31, 2020 balance sheet.
