Blue Corporation is an IFRS reporter. Blue's taxable income is $700,000 and the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. Management has assessed that it is probable that it will not realize 30% of the deferred tax asset. Assuming a 40% tax rate, how should the realizable deferred tax asset be recorded? Group of answer choices Income Tax Expense 13,500 Deferred Tax Asset 31,500 Valuation Allowance– for Deferred Tax 45,000 Deferred Tax Asset 13,500 Valuation Allowance for Deferred Tax 13,500 Income Tax Expense 235,000 Deferred Tax Asset 45,000 Income Tax Payable 280,000 Income Tax Expense 248,500 Deferred Tax Asset 31,500 Income Tax Payable 280,000
Blue Corporation is an IFRS reporter. Blue's taxable income is $700,000 and the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. Management has assessed that it is probable that it will not realize 30% of the deferred tax asset. Assuming a 40% tax rate, how should the realizable deferred tax asset be recorded? Group of answer choices Income Tax Expense 13,500 Deferred Tax Asset 31,500 Valuation Allowance– for Deferred Tax 45,000 Deferred Tax Asset 13,500 Valuation Allowance for Deferred Tax 13,500 Income Tax Expense 235,000 Deferred Tax Asset 45,000 Income Tax Payable 280,000 Income Tax Expense 248,500 Deferred Tax Asset 31,500 Income Tax Payable 280,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 11RE: Barth James Inc. has the following deferred tax assets and liabilities: 12,000 noncurrent deferred...
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Blue Corporation is an IFRS reporter. Blue's taxable income is $700,000 and the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. Management has assessed that it is probable that it will not realize 30% of the deferred tax asset. Assuming a 40% tax rate, how should the realizable deferred tax asset be recorded?
Group of answer choices
| Income Tax Expense | 13,500 | |
| Deferred Tax Asset | 31,500 | |
| Valuation Allowance– for Deferred Tax | | 45,000 |
| Deferred Tax Asset | 13,500 | |
| Valuation Allowance for Deferred Tax | | 13,500 |
| Income Tax Expense | 235,000 | |
| Deferred Tax Asset | 45,000 | |
| Income Tax Payable | | 280,000 |
| Income Tax Expense | 248,500 | |
| Deferred Tax Asset | 31,500 | |
| Income Tax Payable | | 280,000 |
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