Assume that Holyfield Co's income before taxes and before all items causing timing differences totaled $200,000 in year A (Holyfield's first year of operations) and $250,000 in year B.

Timing differences in years A and B are due in part to an asset purchased on 1/1/A (cost: $180,000, salvage value: 0, useful life: 5 years). It is being depreciated straight-line for financial accounting purposes but using the sum-of-the-years' digits method for tax purposes.

Other timing differences arise because Holyfield provides one-year warranties for their products. Estimated warranty expenses in years A and B (using the accrual method) were $20,000 and $40,000 respectively. Expenditures for actual repairs of warranted items were $12,000 in year A and $30,000 in year B. For tax purposes, assume warranty costs are deductible when paid.

Tax rates are 40% in year A and B, but a tax law change enacted in year B changes Holyfield's rate to 30% for year C and thereafter. Holyfield believes it is likely that there will be ample income in future years to fully utilize any deductible amounts that may arise. Provide the following information (if zero, indicate that), and be sure to show your work

a. Year A taxable income:

b. Year A tax expense:

c. Year B taxable income:

d. Year B tax expense:

e. Year B ending balance in noncurrent net deferred tax asset or liablity (Indicate which)