Blue Corporation Is an IFRS Reporter B) C) D)

Blue Corporation is an IFRS reporter. Blue's taxable income is $700,000 and the company estimates a deferred tax asset of $45,000 due to a book-tax difference in warranty liabilities. Management has assessed that it is probable that it will not realize 30% of the deferred tax asset. Assuming a 40% tax rate, how should the realizable deferred tax asset be recorded?

A) $$\begin{array} { | c | r | r | } \hline \text { Income Tax Expense } & 235,000 & \\\hline \text { Deferred Tax Asset } & 45,000 & \\\hline \text { Income Tax Payable } & & 280,000 \\\hline\end{array}$$
B) $$\begin{array} { | c | r | r | } \hline \text { Income Tax Expense } & 248,500 & \\\hline \text { Deferred Tax Asset } & 31,500 & \\\hline \text { Income Tax Payable } & & 280,000 \\\hline\end{array}$$
C) $$\begin{array} { | l | r | r | } \hline \text { Deferred Tax Asset } & 13,500 & \\\hline \text { Valuation Allowance for Deferred Tax } & & 13,500 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Income Tax Expense } & 13,500 & \\\hline \text { Deferred Tax Asset } & 31,500 & \\\hline \text { Valuation Allowance- for Deferred Tax } & & 45,000 \\\hline\end{array}$$