In 2017, Phillips Company reported $10,000 of pre-tax book income and also had $10,000 of taxable income.
Question:
10% likelihood of realizing ......... $350
15% likelihood of realizing .......... $250
30% likelihood of realizing .......... $50
45% likelihood of realizing ........... $0
Required:
1. Based on these facts, provide the journal entry that Phillips would make in 2017 to record its income tax activity, including the tax contingency for unrecognized tax benefits.
2. Provide the entry Phillips would make in 2018 to record any change in the status of the tax contingency reserve.
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Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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