At the end of the current year, Brothers company claims a $225,000 tax credit on its income tax return. Brothers is uncertain about whether the IRS will accept the credit. After some research it is determined that the IRS may not accept all of the tax credit. Brothers estimates the likelihood using the following probability distribution:

Required:
For the current year determine:
1) the amount Brothers will be able to recognize as a current tax benefit

2) the amount that will be record as the unrecognized tax benefit.

Question

At the end of the current year, Brothers company claims a $225,000 tax credit on its income tax return. Brothers is uncertain about whether the IRS will accept the credit. After some research it is determined that the IRS may not accept all of the tax credit. Brothers estimates the likelihood using the following probability distribution:

Required:
For the current year determine:
1) the amount Brothers will be able to recognize as a current tax benefit

2) the amount that will be record as the unrecognized tax benefit.

Required:
For the current year determine:
1) the amount Brothers will be able to recognize as a current tax benefit

2) the amount that will be record as the unrecognized tax benefit.

Quizplus · Accepted Answer

The Answer of At the end of the current year, Brothers company claims a $225,000 tax credit on its income tax return. Brothers is uncertain about whether the IRS will accept the credit. After some research it is determined that the IRS may not accept all of the tax credit. Brothers estimates the likelihood using the following probability distribution:

Required:
For the current year determine:
1) the amount Brothers will be able to recognize as a current tax benefit

2) the amount that will be record as the unrecognized tax benefit.

At the End of the Current Year, Brothers Company Claims