For calendar year 2021, Sandhill Corp. reported depreciation of $1680000 in its income statement. On its 2021 income tax return, Sandhill reported depreciation of $2552000. Sandhill's income statement also included $324000 accrued warranty expense that will be deducted for tax purposes when paid. Sandhill's enacted tax rates are 20% for 2021 and 20

Question

For calendar year 2021, Sandhill Corp. reported depreciation of

$1680000

in its income statement. On its 2021 income tax return, Sandhill reported depreciation of

$2552000

. Sandhill's income statement also included

$324000

accrued warranty expense that will be deducted for tax purposes when paid. Sandhill's enacted tax rates are

20%

for 2021 and 2022, and

15%

for 2023 and 2024. The depreciation difference and warranty expense will reverse over the next three years as follows: These were Sandhill's only temporary differences. In Sandhill's 2021 income statement, the deferred portion of its provision for income taxes should be

$96000.
$179400.
$105800.
$109600.

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