McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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Saginaw, Inc.completed its first year of operations with a pre-tax loss of $500,000.The tax return showed a net operating loss of $600,000, which the Company will carry forward.The $100,000 book-tax difference results from excess tax depreciation over book depreciation.Management has determined that they should record a valuation allowance equal to the net deferred tax asset.Assuming the current tax expense is zero, prepare the journal entries to record the deferred tax provision and the valuation allowance.