Delta Catfish Company has taken a position in its tax return to claim a tax credit of $110 million (direct reduction in taxes payable) andhas determined that its sustainability is "more likely than not," based on its technical merits. Delta has developed the probability tableshown below of all possible material outcomes:Probability Table ($ in millions)Amount of the tax benefit that management expects to receivePercentage likelihood that the tax benefit will be sustained at this levelDelta's taxable income is $476 million for the year. Its effective tax rate is 25%. The tax credit would be a direct reduction in currenttaxes payable.Required:1. At what amount would Delta measure the tax benefit in its income statement?2. Prepare the appropriate journal entry for Delta to record its income taxes for the year.Complete this question by entering your answers in the tabs below.Required 1 Required 2At what amount would Delta measure the tax benefit in its income statement? (Enter your answers in millions (i.e.,10,000,000 should be entered as 10).)Tax benefitmillion$110 $110 $108 $96 $9410% 20% 25% 20% 25%< Required 1Required 2 > Required 1 Required 2Prepare the appropriate journal entry for Delta to record its income taxes for the year. (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., 5,500,000 should be entered as 5.5).)View transaction listJournal entry worksheet1Record income taxes.Note: Enter debits before credits.Event1Record entryGeneral JournalClear entry< Required 1DebitCreditView general journalRequired 2>

Amount of the tax benefit that management expects to receive$110$110$108$96$94Percentage likelihood…

Delta Catfish Company has taken a position in its tax return to claim a tax credit of $110 million (direct reduction in taxes payable) and has determined that its sustainability is "more likely than not," based on its technical merits. Delta has developed the probability table shown below of all possible material outcomes: Probability Table ($ in millions) Amount of the tax benefit that management expects to receive Percentage likelihood that the tax benefit will be sustained at this level $110 $110 $108 $96 $94 10% 20% 25% 20% 25% Delta's taxable income is $476 million for the year. Its effective tax rate is 25%. The tax credit would be a direct reduction in current taxes payable. Required: 1. At what amount would Delta measure the tax benefit in its income statement? 2. Prepare the appropriate journal entry for Delta to record its income taxes for the year.

Delta Catfish Company has taken a position in its tax return to claim a tax credit of $110 million (direct reduction in taxes payable) and has determined that its sustainability is "more likely than not," based on its technical merits. Delta has developed the probability table shown below of all possible material outcomes: Probability Table ($ in millions) Amount of the tax benefit that management expects to receive Percentage likelihood that the tax benefit will be sustained at this level $110 $110 $108 $96 $94 10% 20% 25% 20% 25% Delta's taxable income is $476 million for the year. Its effective tax rate is 25%. The tax credit would be a direct reduction in current taxes payable. Required: 1. At what amount would Delta measure the tax benefit in its income statement? 2. Prepare the appropriate journal entry for Delta to record its income taxes for the year.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 73TA

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