Delta Catfish Company has taken a position in its tax return to claim...
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Accounting
Delta Catfish Company has taken a position in its tax return to claim a tax credit of $ million direct reduction in taxes payable and has determined that its sustainability is "more likely than not," based on its technical merits. Delta has developed the probability table shown below of all possible material outcomes:
Probability Table $ in millions
Amount of the tax benefit that management expects to receive
Delta's taxable income is $ million for the year. Its effective tax rate is The tax credit would be a direct reduction in current taxes payable.
Required:
At what amount would Delta measure the tax benefit in its income statement?
Prepare the appropriate journal entry for Delta to record its income taxes for the year.
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