Question

At the end of 2015, Harrybean's tax accountant indicated that only $1,000 of the $2100 balance in deferred tax assets that Harrybean would otherwise have on its balance sheet was realizable from a 51% profitability.

1. Record any entry (ies) necessary to reflect this information and create any t-accounts that you deem necessary.

Deferred Tax Asset (t-account)

800

1300

2100.

Answer 1

Date	Account Description	Debit	Credit
	Deferred Tax Expenses	2100
	Deferred Tax Assets		2100
	(Being Deferred Tax Assets Reversed)

T Accounts:

Deferred Tax Assets
	Debit	Credit
Beginning Balance	2,100
Deferred Tax Expenses		2,100
Ending Balance	-
	2,100	2,100

Please Note I have reversed total 2100, 1100 reversed because we will not realize this and 1000 reversed because we will claim in this in the current year.

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