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Please make the response detailed and easy to read, thank you Reporting a Deferred Tax...

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Accounting

Please make the response detailed and easy to read, thank you

Reporting a Deferred Tax Liability

On December 31, 2020, Lexxus Inc. recorded an unrealized gain in income of $5,000 related to its trading debt securities originally purchased on December 15, 2020, for $20,000. Lexxus recognized pretax GAAP income of $80,000 in 2020 and had a tax rate of 25%.

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a. Determine the reported amount of trading securities in the financial statements of Lexxus on December 30, 2020. Trading securities (GAAP basis) $ 5,000 x b. Determine the tax basis of the trading securities on December 30, 2020. Trading securities (tax basis) $ 20,000 C. Calculate the deferred tax balance and show how it would be reported in the December 31, 2020, balance sheet of Lexxus. 1 2020 Balance Sheet, Dec. 31 Noncurrent liabilities Deferred Tax Liability $ 1,250

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