E 10-19

[Tax] Valuation allowance Krab Corporation recognizes a deferred tax asset (benefit) of $175,000 related to its acquisition of Khun Corporation.

Krab has determined that the tax position qualifies for recognition and should be measured. Krab has determined the amounts and the probabilities of the possible outcomes as follows:

Possible Estimated Outcome Probability of Occurring (%)

$175,000 50 150,000 10 125,000 10 100,000 05 75,000 05 50,000 10 0 10 REQuIRED: Calculate the tax benefit to be recognized by Krab Corporation.

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