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Recording Income Tax Expense with an Uncertain Tax Position Randolph Inc. considered the probability of a recent tax position taken related to the exclusion
Recording Income Tax Expense with an Uncertain Tax Position Randolph Inc. considered the probability of a recent tax position taken related to the exclusion of certain revenues of $25,000 from taxable revenue. Randolph determined that this position is more likely than not to be sustained in future discussions with taxing authorities. Using available information, Randolph Inc. created the following summary of the probabilities of sustaining its tax position: Possible Estimated Outcome (Allowable Revenue Exclusion) Individual Probability Of Occurring $25,000 10% 200,000 20% 15,000 25% 12,500 30% 2,500 15% Required Assuming taxable income of $125,000 (reflecting the exclusion of the $25,000 uncertain tax revenue) and a tax rate of 25%, record the income tax journal entry for 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Account Name Dr. Cr. 0 0 0 0 = 0 0
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