At the end of the prior year, Ferguson Corp. had a deferred tax asset of $25,000,000 attributable to its only timing difference, a temporary difference of $50,000,000 in a liability for estimated expenses. At that time a valuation allowance of $3,800,000 was established. At the end of the current year, the temporary difference is $40,000,000, and Sobchek determines that the balance in the valuation account should now be $6,000,000. Taxable income is $18,000,000 and the tax rate is 30% for all years.
Required:
Prepare journal entries to record Sobchek's income tax expense for the current year. Show well-labeled supporting computations for the income tax payable, the valuation allowance, and the change in the deferred tax asset account.