Response to the following problem:
Turnip Company purchased an asset at a cost of $10,000 with a ten-year life during the current year. The company uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is $1,000 and for income tax purposes is $2,000. Turnip is subject to a 30% enacted future tax rate.
Prepare a schedule to compute Turnip's
(a) ending future taxable amount,
(b) ending deferred tax liability, and
(c) change in deferred tax liability (deferred tax expense) for the current year.