Reporting Deferred Taxes in Balance Sheet Kate Club Inc. has determined that there are four temporary differences between the tax bases and the GAAP bases of assets and liabilities that resulted in the following deferred taxes: (a) deferred tax liability related to accelerated tax depreciation over straight-line depreciation: $36,000; (b) deferred tax asset related to deferred contact revenue collected in advance, $43,200; (c) deferred tax asset related to bad debt expense recognized on an allowance basis, $18,000; and (d) deferred tax liability related to prepaid automobile insurance, $14,400. Prepare the balance sheet presentation of deferred taxes..

1. Reporting Deferred Taxes in Balance Sheet Kate Club Inc. has determined that there are four
temporary differences between the tax bases and the GAAP bases of assets and liabilities that
resulted in the following deferred taxes: (a) deferred tax liability related to accelerated tax
depreciation over straight-line depreciation: $36,000; (b) deferred tax asset related to deferred
contact revenue collected in advance, $43,200; (c) deferred tax asset related to bad debt expense
recognized on an allowance basis, $18,000; and (d) deferred tax liability related to prepaid
automobile insurance, $14,400. Prepare the balance sheet presentation of deferred taxes.