Pam Corporation recognizes a deferred tax asset (benefit) of $1,000,000 related to its acquisition of Sun Company. Pam has determined that the tax position qualifies for recognition and should be measured. Pam has determined the amounts and the probabilities of the possible outcomes, as follows:
Possible Estimated Outcome Probability of Occurring (%)
$1,000,000 ................................................. 10
800,000 ..................................................... 25
600,000 ..................................................... 25
400,000 ..................................................... 20
200,000 ..................................................... 10
0 .............................................................. 10
REQUIRED:
Calculate the tax benefit to be recognized by Pam.