Description of this paper

E19-14B (Deferred Tax Asset with and without Valuation Account)NovaSci, Inc. has a deferred tax asset account with a balance of $255,000 at the end of 2013 due to a single cumulative temporary difference of $850,000. At the end of 2014 this same temporary

Description

solution


Question

E19-14B (Deferred Tax Asset with and without Valuation Account)NovaSci, Inc. has a deferred tax asset account with a balance of $255,000 at the end of 2013 due to a single cumulative temporary difference of $850,000. At the end of 2014 this same temporary difference has decreased to a cumulative amount of $750,000. Taxable income for 2014 is $650,000. The tax rate is 30% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2013.;Instructions;(a) Record income tax expense, deferred income taxes, and income taxes payable for 2014, assuming that it is more likely than not that the deferred tax asset will be realized.;(b) Assuming that it is more likely than not that one-half of the deferred tax asset will not be realized, prepare the journal entry at the end of 2014 to record the valuation account.

 

Paper#75312 | Written in 18-Jul-2015

Price : $27
SiteLock