Prepare the journal entry to record payne income taxes

Assignment Help Financial Accounting
Reference no: EM133004411

At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $25 million attributable to a temporary book-tax difference of $100 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $64 million. Payne has no other temporary differences. Taxable income for 2021 is $180 million and the tax rate is 25%.

Payne has a valuation allowance of $10 million for the deferred tax asset at the beginning of 2021.

Required:

Problem 1. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full.

Problem 2. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.

Reference no: EM133004411

Questions Cloud

Calculate capital gains and losses : Calculate Capital Gains and Losses. James, a single person, sold 500 shares of stock at $12 per share. He purchased this stock at $10 per share two years ago.
What alternative suits martina : Promissory notes of $71430 one to 6 and 10 months term. If Alejandro can invest at 1.2% per month with monthly capitalization. What alternative suits you?
What will be the cash balance on the pro forma cash budget : If minimum cash balance is $5,000; beginning loan balance is $4,500, what will be the cash balance on the pro forma cash budget at the end of January?
Which is a consideration when a company decides : Which is a consideration when a company decides which customers should receive credit? The amount of potential business from the customer
Prepare the journal entry to record payne income taxes : Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset
Estimate the incremental annual free cash flows : Estimate the incremental annual free cash flows (FCF) generated by the new facility. Estimate the initial net investment (net outlays) associated.
Wacc on a pre-tax basis for a proposed construction : What is the WACC on a pre-tax basis for a proposed construction project with the following make-up: Total project cost is $8,000,000 A loan-to-cost {LTCl of 70%
Identify and describe each of the alternative method : Several additional inventory methods may be used when circumstances warrant. Identify and describe each of these alternative methods.
Determine how much must set aside each year to make sure : If the interest rate is 6%?, how much must you set aside each year to make sure that you will have $3 million in the account on your 65th ?birthday?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Compute break-even point in dollar-contribution margin ratio

Rawling Corporation sells golf bags and has developed the following information: Prepare a detailed CVP income statement using the contribution margin format for Rawling Corporation for 2015. Compute the contribution margin per unit. Compute the cont..

  Find how much final tax should be withheld from the prize

Find How much final tax should be withheld from the prize? Ms. Matti won a gold medal and P50, 000 cash prize for chess competition in the Palarong Pambansa.

  How would reported earnings have been affected

MFE 6110 - Financial Statement Analysis - Ohio University - Over what time period are Deere's tax credit carryforwards expiring? Do you think Deere will be able

  What is meant by profit and cash flow

What is meant by Profit and Cash flow and how they are different. Trend Ltd ("TL") manufactures gym clothing and footwear. It supplies several large design

  What increase in sales is necessary to pay for credit card

Assuming that only 5% of existing cash customers will use a credit card, what increase in sales is necessary to pay for the credit card equipment in first year

  Shares of preferred stock issued

As of January 2, 2012, The Triple J Company had (i) 12,000 shares of preferred stock issued, with a par value of $7, an annual dividend of $2, and 3,000 shares in the treasury, and (ii) 24,000 shares of common stock issued, with a stated value of $5 ..

  What is the initial market value of the unlevered? equity

How much money can be raised in this way-that ?is, what is the initial market value of the unlevered? equity? What is the NPV of this? project?

  Prepare donn communications cash budget

Prepare Donn Communications' cash budget for 2012. Will the budgeted level of cash receipts leave Donn with the desired ending cash balance of $79 million, or will the company need additional financing? If so, how much?

  What action foreign central banks can be utilized

What actions by U.S. and foreign central banks can be utilized to adjust currencies? How do these actions work and what is the effect?

  Compute the break-even point in units and dollars

Compute the break-even point in units and dollars and margin of safety in dollars Assuming no changes to selling price or costs

  Which liability that represents the accumulated

Which liability that represents the accumulated difference between the income tax expense reported on the firm's books and the income tax actually paid is

  Find what will be the net mutual interest spread earned

If the bank is able to continually renew the CD over the next 5 years, what will be the net mutual interest spread earned by the bank across the CD

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd