Recording Income Tax Expense with Tax Uncertainty Springs Inc. has taken a tax position in 2020 that it believes is based on fairly clear tax law for the payment of $80,000 in salaries and benefits to employees. There are no limits on deductibilty and all amounts were fully paid within the statutory time limit, although there is some question on the company's policies for capitalization of a portion of the salaries. Management has a fairly high confidence level in the technical merits of this position. It is clear that it is greater than 50% likely that the full amount of the tax position will be ultimately realized, but it is less than 100%. Springs estimates the probability of sustaining the entire tax position with taxing authorities at 60%. Springs Inc. taxable income is $100,000, which includes the salary deduction of $80,000 referenced above. If the Springs Inc. tax rate is 25% (with no other deferred items), record the income tax journal entry required on December 31, 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Note: If the journal entry includes an extra line that is not required, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero) in the very last row of the journal entry. Dr. Cr. 25,000 Date Account Name Dec. 31, 2020 Income Tax Expense Valuation Allowance for Deferred Tax Asset Liability for Unrecognized Tax Benefits 0 ooo 0 Please answer all parts of the question. Recording Income Tax Expense with Tax Uncertainty Springs Inc. has taken a tax position in 2020 that it believes is based on fairly clear tax law for the payment of $80,000 in salaries and benefits to employees. There are no limits on deductibilty and all amounts were fully paid within the statutory time limit, although there is some question on the company's policies for capitalization of a portion of the salaries. Management has a fairly high confidence level in the technical merits of this position. It is clear that it is greater than 50% likely that the full amount of the tax position will be ultimately realized, but it is less than 100%. Springs estimates the probability of sustaining the entire tax position with taxing authorities at 60%. Springs Inc. taxable income is $100,000, which includes the salary deduction of $80,000 referenced above. If the Springs Inc. tax rate is 25% (with no other deferred items), record the income tax journal entry required on December 31, 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Note: If the journal entry includes an extra line that is not required, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero) in the very last row of the journal entry. Dr. Cr. 25,000 Date Account Name Dec. 31, 2020 Income Tax Expense Valuation Allowance for Deferred Tax Asset Liability for Unrecognized Tax Benefits 0 ooo 0 Please answer all parts of the
