income tax liability by $400,000 as a result of these strategies, but that the IRS is likely to challenge the policies in an audit Lace Co estimates that the tax benefit ultimately realized may be less than the current tax savings. The potential benefits and related probabilities are presented in the following table. Resulting Estimated Probability of Realizing Cumulative Probability Tax Benefit Tax Benefit of Realization $400,000 10% 300,000 35% 45% 250,000 10% 40% 85% -0- 15% 100% LaceCo recorded a book tox provision of $600,000, including the $400,000 tax benefit from this tax uncertainty. a. Determine the amount that LaceCo should record for the tax benefit from this item under GAAP rules and ASC 740-10. b. Construct the journal entry that Laceco should record. JOURNAL DATE Description Post. Ref. Debit Credit