Reference no: EM132896918

Question - At the end of 2020, there was a $16M balance in Maxwell Co, Inc.'s deferred tax asset account. The balance was attributable to a cumulative temporary difference of $35M in a liability for estimated expenses. The tax rate is 30%. No temporary differences existed at the beginning of the year. Assuming it is more likely than not that one-half of the deferred tax assets will not be realized, prepare the journal entry to record income taxes. Taxable income is $50M.