At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $30 million attributable to a temporary book- tax difference of $120 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $80 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $216 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 Record 2024 income taxes. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Show less A
At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $30 million attributable to a temporary book- tax difference of $120 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $80 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $216 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 Record 2024 income taxes. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Show less A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $30 million attributable to a temporary book-
tax difference of $120 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $80 million. Payne
has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $216 million and
the tax rate is 25%.
Required:
1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax
asset will be realized in full.
2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of
the deferred tax asset ultimately will be realized.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will
be realized in full.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in
millions (i.e., 10,000,000 should be entered as 10).
View transaction list
Journal entry worksheet
<
1
2
Record 2024 income taxes.
Note: Enter debits before credits.
Transaction
1
Record entry
General Journal
Clear entry
Required 1
Debit
Credit
View general journal
Required 2 >
Show less A
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