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.

Answer rating: 100% (QA)

Required solution The Deferred tax asset should be reduced to reflect the reali... View the full answer