North,Inc. ,earns book net income before tax of $500,000 in 2010.In computing its book income,North deducts $50,000 more in warranty expense for book purposes than allowed for tax purposes.North has no other temporary or permanent differences.Assuming the U.S.tax rate is 35% and no valuation allowance is required,what is North's deferred income tax asset reported on its financial statements for 2010?

Question

Quizplus · Accepted Answer

The deferred tax asset is calculated as the temporary difference ($50,000) multiplied by the tax rate (35%), which equals $17,500.

North,Inc ,Earns Book Net Income Before Tax of $500,000 in 2010.In