At the end of the year, the deferred tax asset account had a balance of $20.0 million attributable to a cumulative temporary difference of $50 million in a liability for estimated expenses. Taxable income is $65.0 million. No temporary differences existed at the beginning of the year, and the tax rate is 40%.

1. Record the income tax expense

2.Record income taxes assuming it is more likely than not that one-fourth of the deferred tax asset will not ultimately be realized.