1. At the beginning of the year, Schrader, Inc., holds a net operating loss carryforward, and its

balance sheet shows a related deferred tax asset of $500,000. At the end of the year,

the balance in the deferred tax asset account has not changed, but Schraders auditors

want to record a $90,000 valuation allowance against this amount, because of a persistent downturn in Schraders profitability.

Provide the journal entry to record the valuation allowance.