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(a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized in full. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income tax expense) Allowance to Reduce Deferred Tax Asset to Expected Realiz Income Tax Expense (To adjust allowance account) Debit 159600 17200 17200 Credit 176800 17200 (b) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that none of the deferred tax asset will be realized. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

(a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized in full. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income tax expense) Allowance to Reduce Deferred Tax Asset to Expected Realiz Income Tax Expense (To adjust allowance account) Debit 159600 17200 17200 Credit 176800 17200 (b) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that none of the deferred tax asset will be realized. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

FINANCIAL ACCOUNTING
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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Your answer is partially correct. Flint Corp. has a deferred tax asset account with a balance of $78,400 at the end of 2024 due to a single cumulative temporary difference of $392,000. At the end of 2025, this same temporary difference has increased to a cumulative amount of $482,500. Taxable income for 2025 is $791,900. The tax rate is 20% for all years. At the end of 2024, Flint Corp. had a valuation account related to its deferred tax asset of $47,000. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized in full. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income tax expense) Allowance to Reduce Deferred Tax Asset to Expected Realiz Income Tax Expense (To adjust allowance account) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income tax expense) Income Tax Expense (b) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that none of the deferred tax asset will be realized. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Allowance to Reduce Deferred Tax Asset to Expected Rea Debit (To record allowance) 159600 Debit 17200 17200 23580 78400 Credit 78400 176800 Credit 17200 101980 78400
Transcribed Image Text:Your answer is partially correct. Flint Corp. has a deferred tax asset account with a balance of $78,400 at the end of 2024 due to a single cumulative temporary difference of $392,000. At the end of 2025, this same temporary difference has increased to a cumulative amount of $482,500. Taxable income for 2025 is $791,900. The tax rate is 20% for all years. At the end of 2024, Flint Corp. had a valuation account related to its deferred tax asset of $47,000. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized in full. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income tax expense) Allowance to Reduce Deferred Tax Asset to Expected Realiz Income Tax Expense (To adjust allowance account) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable (To record income tax expense) Income Tax Expense (b) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that none of the deferred tax asset will be realized. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Allowance to Reduce Deferred Tax Asset to Expected Rea Debit (To record allowance) 159600 Debit 17200 17200 23580 78400 Credit 78400 176800 Credit 17200 101980 78400
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