At the end of the year, the deferred tax asset account had a balance of $12.8 million attributable to a cumulative temporary dif
ference of $32 million in a liability for estimated expenses. Taxable income is $38.0 million. No temporary differences existed at the beginning of the year, and the tax rate is 40%.Prepare the journal entry(s) to record income taxes assuming it is more likely than not that one-fourth of the deferred tax asset will not ultimately be realized.NOTE:These are the correct entries, I am just missing the values (DTA is NOT zero):Debit: Income Tax Expense ______Debit Deferred Tax Asset _____Credit: Income Tax Payable 15.2Debit: Income Tax Expense _______Credit: Valuation Allowance - Deferred Tax Asset _______
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Answer:
Explanation:
The government taxes packs of cigarettes both to discourage smoking and to raise tax revenue. The average excise tax on a pack of cigarettes is $2.50 per pack. The table below presents the annual demand and supply schedules, in billions of packs, both before and after the tax on packs of cigarettes.
