Answer:
A. Payne Industries
 (In Million)
Dr Income tax expense $54
 Cr To Deferred Tax Assets $9	
 Cr To Income Tax Payable $45	
 No Journal Entry Required 
b. Dr Income tax expense Dr	$54	
 Cr To Deferred Tax Assets $9	
 Cr To Income Tax Payable $45
 Dr Income tax expense $12	
 Cr To Valuation Allowance - Deferred Tax Assets $12
 
Explanation:
a. Preparation of the journal entry(s) to record Payne’s income taxes for 2021, 
Payne Industries
 (In Million)
Dr Income tax expense $54
($45+$9)
 Cr To Deferred Tax Assets $9
[($100-$64)*25%] 
 Cr To Income Tax Payable $45
 ($180*25%)	
(To record income tax expense recorded for 2021 and deferred tax assets reversed for temporary differences reversal ) 
No Journal Entry Required 
b. Preparation of the journal entry(s) to record one-fourth of the deferred tax asset ultimately will be realized
Journal Entries
 (In Million)
 Dr Income tax expense Dr	$54	
($45+$9)
 Cr To Deferred Tax Assets $9
[($100-$64)*25%] 
 Cr To Income Tax Payable $45
 ($180*25%) 
(Being income tax expense recorded for 2021 and deferred tax assets reversed for temporary differences reversal ) 
 Dr Income tax expense $12	
 Cr To Valuation Allowance - Deferred Tax Assets $12
 [($64*75%)*25%]	
(Being to record valuation allowance for deferred tax assets)