(Modified from E16-11) At the end of 2017, Buckeyes Industries had a deferred tax asset account...

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(Modified from E16-11) At the end of 2017, Buckeyes Industries had a deferred tax asset account with a balance of $28 million attributable to a temporary book-tax difference of $70 million in a liability for estimated expenses. At the end of 2018, the temporary difference is $75 million. Buckeyes has no other temporary differences. Taxable income for 2018 is $200 million and the tax rate is 40%. Buckeyes has a valuation allowance of $12 million for the deferred tax asset at the beginning of 2018. Required: 1. Prepare the journal entry(s) to record Buckeyes income taxes for 2018, assuming it is more likely than not that the deferred tax asset will be realized. 2. Prepare the journal entry(s) to record Buckeyes income taxes for 2018, assuming it is more likely than not that two-third of the deferred tax asset will ultimately be realized. (Modified from E16-11) At the end of 2017, Buckeyes Industries had a deferred tax asset account with a balance of $28 million attributable to a temporary book-tax difference of $70 million in a liability for estimated expenses. At the end of 2018, the temporary difference is $75 million. Buckeyes has no other temporary differences. Taxable income for 2018 is $200 million and the tax rate is 40%. Buckeyes has a valuation allowance of $12 million for the deferred tax asset at the beginning of 2018. Required: 1. Prepare the journal entry(s) to record Buckeyes income taxes for 2018, assuming it is more likely than not that the deferred tax asset will be realized. 2. Prepare the journal entry(s) to record Buckeyes income taxes for 2018, assuming it is more likely than not that two-third of the deferred tax asset will ultimately be realized.

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Note For valuation allowances separate entry is given to understand it better in millions Credit 1 E... View the full answer