At the end of 2020, AHD reported a deferred tax asset of $90 million with no valuation allowance. At December 31, 2021, the account balances of AHD showed a deferred tax asset of $110 million before assessing the need for a valuation allowance, and income taxes payable of $80 million. AHD determined that it was more likely than not that 30% of the deferred tax asset ultimately would not be realized. AHD had no other deferred taxes and made no estimated tax payments during 2021. What amount should AHD report as income tax expense in its 2021 Income statement? O $78 million. O $80 million. O $86 million. O $93 million. O $60 million.
At the end of 2020, AHD reported a deferred tax asset of $90 million with no valuation allowance. At December 31, 2021, the account balances of AHD showed a deferred tax asset of $110 million before assessing the need for a valuation allowance, and income taxes payable of $80 million. AHD determined that it was more likely than not that 30% of the deferred tax asset ultimately would not be realized. AHD had no other deferred taxes and made no estimated tax payments during 2021. What amount should AHD report as income tax expense in its 2021 Income statement? O $78 million. O $80 million. O $86 million. O $93 million. O $60 million.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:At the end of 2020, AHD reported a deferred tax asset of $90 million with no valuation allowance. At December 31, 2021, the account balances of AHD showed a deferred tax asset of $110 million before assessing the need for
a valuation allowance, and income taxes payable of $80 million. AHD determined that it was more likely than not that 30% of the deferred tax asset ultimately would not be realized. AHD had no other deferred taxes and made
no estimated tax payments during 2021. What amount should AHD report as income tax expense in its 2021 income statement?
O $78 million.
O $80 million.
O $86 million.
O $93 million.
O $60 million.
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