Ion Corporation has an income tax expense/payable for book purposes of $401,120
ID: 2337548 • Letter: I
Question
Ion Corporation has an income tax expense/payable for book purposes of $401,120 and $501,400 for tax purposes. According to Ion’s management and financial auditors, Ion only will be able to use $60,168 of any deferred tax asset with the balance expiring.
Determine the amount of Ion's deferred tax asset and valuation allowance from this year’s activities, and construct Ion’s related journal entry for these items.
As a result, Ion will record a deferred tax asset of $100,280 and a valuation allowance of $40,112
DATEDescription
Debit
Credit Income tax expense (provision) ?? Deferred tax asset ??? ($60,168 is incorrect) Income tax payable 501,400 Valuation allowance 40,112
Explanation / Answer
Date Description Debit Credit Income tax expense (provision) 441,232 Deferred tax asset 100,280 Income tax payable 501,400 Valuation allowance 40,112
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