As of December 31, 2016, the Williamsburg Company reported a deferred tax asset of $60,000 related to
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As of December 31, 2016, the Williamsburg Company reported a deferred tax asset of $60,000 related to accrued, unpaid warranty costs. However, since profits have been declining, Williamsburg decides that it is more likely than not that $24,000 of the deferred tax asset will not be realized. The entry to record the valuation allowance would include a
a. credit to Income Tax Expense for $24,000.
b. debit to Income Tax Expense for $60,000.
c. debit to Allowance to Reduce Deferred Tax Asset to Realizable Value for $24,000.
d. credit to Allowance to Reduce Deferred Tax Asset to Realizable Value for $24,000.
Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: 978-0078025822
17th edition
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson
Posted Date: