VB Ltd.provided you with the following information: There are no temporary differences.The deferred income tax benefit of the loss carry forward was set up in 2015 as the probability of realization was greater than 50%.In 2016 it was determined that the probability of realization was less than 50%.What would be the carrying amount of the deferred income tax benefit-loss carry forward on the balance sheet at the end of 2016?
A) $194,100
B) $0
C) $220,000
D) $64,600

Question

VB Ltd.provided you with the following information:  There are no temporary differences.The deferred income tax benefit of the loss carry forward was set up in 2015 as the probability of realization was greater than 50%.In 2016 it was determined that the probability of realization was less than 50%.What would be the carrying amount of the deferred income tax benefit-loss carry forward on the balance sheet at the end of 2016?
A) $194,100 
B) $0 
C) $220,000 
D) $64,600

Quizplus · Accepted Answer

The deferred income tax benefit should be reversed if the probability of realization falls below 50%. Therefore, the carrying amount of the deferred income tax benefit-loss carry forward on the balance sheet at the end of 2016 would be $0.

VB LtdProvided You with the Following Information: There Are No