Question: JiangCo constructs the following table in determining how to apply ASC 740-10 to its filing position for a transfer pricing issue. Its book tax provision

JiangCo constructs the following table in determining how to apply ASC 740-10 to its filing position for a transfer pricing issue. Its book tax provision for the year, including $3 million for the uncertain transfer pricing issue, is $10 million.

Resulting Estimated Tax Benefit Probability of Agreement between JiangCo and IRS Cumulative Probability of Agreement
$3 million 10% 10%
$2 million 35% 45%
$1.6 million 40% 85%
$1.1 million 15% 100%

Under ASC 740-10, JiangCo's book income tax expense for this item is:

a.$11.4 million.

b.$10 million.

c.$11.6 million.

d.$13 million.

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