Resource Company is evaluating a tax position resulting in a deduction taken for $400,000. Resource Company's tax rate is 21%. When assessing the uncertain tax position using the recognition criteria, Resource Company has determined that it is more-likely-than-not that this position will be sustained on examination by the tax authority. In performing the measurement step, Resource Company determined that $250,000 is the largest tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the taxing authority. What journal entry should Resource Company record related to the tax-effected liability for unrecognized tax benefit? A. Dr: Liability for unrecognized tax benefit $31,500 Cr: Income tax expense $31,500 B. Dr: Income tax expense $31,500 Cr: Liability for unrecognized tax benefit $31,500 C. Dr: Income tax expense $52,500 Cr: Liability for unrecognized tax benefit $52,500 D. Dr: Liability for unrecognized tax benefit $52,500 Cr: Income tax expense $52,500
Resource Company is evaluating a tax position resulting in a deduction taken for $400,000. Resource Company's tax rate is 21%. When assessing the uncertain tax position using the recognition criteria, Resource Company has determined that it is more-likely-than-not that this position will be sustained on examination by the tax authority. In performing the measurement step, Resource Company determined that $250,000 is the largest tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the taxing authority. What
A. Dr: Liability for unrecognized tax benefit $31,500 Cr: Income tax expense $31,500
B. Dr: Income tax expense $31,500 Cr: Liability for unrecognized tax benefit $31,500
C. Dr: Income tax expense $52,500 Cr: Liability for unrecognized tax benefit $52,500
D. Dr: Liability for unrecognized tax benefit $52,500 Cr: Income tax expense $52,500
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