aj.3 At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $110 million attributable to atemporary book-tax difference of $440 million in a liability for estimated expenses. At the end of 2024, the temporarydifference is $336 million. Payne has no other temporary differences. Taxable income for 2024 is $792 million and thetax rate is 25%.Payne has a valuation allowance of $44 million for the deferred tax asset at the beginning of 2024.Required:1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that thedeferred 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 onlyone-fourth of the deferred tax asset ultimately will be realized.X Answer is not complete.Complete this question by entering your answers in the tabs below.Required Required12Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is morelikely than not that the deferred tax asset will be realized in full.Note: If no entry is required for a transaction/event, select "No journal entry required" inthe first account field. Enter your answers in millions (i.e., 10,000,000 should be enteredas 10).No Transaction1122General JournalIncome tax expenseDeferred tax assetIncome tax payableNo journal entry requiredRequired 1XRequired 2 >Debit224✔Show lessCredit26✔198 At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $110 million attributable to atemporary book-tax difference of $440 million in a liability for estimated expenses. At the end of 2024, the temporarydifference is $336 million. Payne has no other temporary differences. Taxable income for 2024 is $792 million and thetax rate is 25%.Payne has a valuation allowance of $44 million for the deferred tax asset at the beginning of 2024.Required:1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that thedeferred 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 onlyone-fourth of the deferred tax asset ultimately will be realized.Answer is not complete.Complete this question by entering your answers in the tabs below.Required Required12Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is morelikely than not that only one-fourth of the deferred tax asset ultimately will be realized.Note: If no entry is required for a transaction/event, select "No journal entry required" inthe first account field. Enter your answers in millions rounded to 1 decimal place (i.e.,5,500,000 should be entered as 5.5).No12Event12General JournalIncome tax expenseValuation allowanceNo journal entry required< Required 1XXRequired 2 >Debit83 XShow less ▲Credit83X

A deferred tax asset is a balance sheet item that ultimately either lowers an income tax burden of a…

At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $110 million attributable to a temporary book-tax difference of $440 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $336 million. Payne has no other temporary differences. Taxable income for 2024 is $792 million and the tax rate is 25%. Payne has a valuation allowance of $44 million for the deferred tax asset at the beginning of 2024. 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. X Answer is not complete. Complete this question by entering your answers in the tabs below. Required Required 1 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). No 1 2 Transaction 1 2 General Journal Income tax expense Deferred tax asset Income tax payable No journal entry required < Required 1 Required 2 > Debit 224 Show less Credit 26 198

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q