Mostel Company has each of the following items on its balance sheet at December 31,2014:
The prepaid expenses have already been deducted for tax purposes.No deductions have yet been take related to the warranty liability or the postretirement liability other than pensions.No evidence exists that the goodwill is impaired.The current and future tax rate is 35 percent.
Required:
1.Explain which of the above items requires a deferred tax amount to be recorded,the amount of each,whether each is a deferred tax asset or a deferred tax liability.
2.Determine the amounts of deferred tax asset and deferred tax liability that would be reported on the balance sheet and the current or noncurrent classification of each.
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