Button Company has two differences between its taxable income and its financial statement reported income, so also between its tax expense and current taxes payable. Here is the information:
2008 2009
Pretax financial statement income $840,000 $910,000
Excess depreciation expense on tax return (30,000) (40,000)
Excess warranty expense in financial statement income 20,000 10,000
Taxable income $830,000 $880,000 The income tax rate for both years is 40%.
Required: What is the income tax expense, the current tax liability and the deferred income tax liability and asset balances for 2008 year-end financial statements only.