Exercise 16-12 (Algo) Deferred tax asset; taxable income given; valuation allowance [LO16-4]At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $115 million attributable to a temporary book-tax difference of $460 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $352 million. Paynehas no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $828 millionand 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 taxasset 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 ofthe deferred tax asset ultimately will be realized.Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset willbe realized in full.transaction/vnnt coloct "No inurnal ontru roquired" in the first accofiald Enter your aneuiore in

Solution 1:Payne IndustriesJournal EntriesEventParticularsDebit (In Million)Credit (In…

Answered: 23, Payn $460 mi mporary c is 25%. he…

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Accounting

23, Payn $460 mi mporary c is 25%. he journa

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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Exercise 16-12 (Algo) Deferred tax asset; taxable income given; valuation allowance [LO16-4]
At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $115 million attributable to a temporary book-
tax difference of $460 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $352 million. Payne
has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $828 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.
transaction/vnnt coloct "No inurnal ontru roquired" in the first acco
fiald Enter your aneuiore in

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