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This is chapter 16 E-11 of Intermediate Accounting 2 by the authors Spiceland, Nelson, and Thomas. If deferred asset is normally a credit balance when
This is chapter 16 E-11 of Intermediate Accounting 2 by the authors Spiceland, Nelson, and Thomas.
If deferred asset is normally a credit balance when it is decreased from 30,000,000 to 28,000,000 wouldn't it be debited in the above journal entry instead of credited?
At the end of 2017, Payne Industries had a deferred tax asset account with a balance of $30 million attributable to a temporary book-tax difference of $75 million in a liability for estimated expenses. At the end of 2018, the temporary difference is $70 million. Payne has no other temporary differences. Taxable income for 2018 is $180 million and the tax rate is 40%. Payne has a valuation allowance of $10 million for the deferred tax asset at the beginning of 2018. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2018, assuming it is more likely than not that the deferred tax asset will be realized. Step 3: Prepare the Entry: Debit Date Post Ref. Credit (S) (S) 2018 74,000,000 Account Title and Explanation Income Tax Expense (E-) (balancing amount) Deferred Tax Asset (A-) Income Tax Payable (L+) (To record the income tax provision for 2018) 2.000.000 72,000,000 CommentStep by Step Solution
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