Question
At the end of 2015, Payne Industries had a deferred tax asset account with a balance of $38 million attributable to a temporary booktax difference
At the end of 2015, Payne Industries had a deferred tax asset account with a balance of $38 million attributable to a temporary booktax difference of $95 million in a liability for estimated expenses. At the end of 2016, the temporary difference is $90 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2016 is $190 million and the tax rate is 40%. |
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1. | Prepare the journal entry(s) to record Paynes income taxes for 2016, assuming it is more likely than not that the deferred tax asset will be realized.
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