P18 - 91 Uncertain tax position and unrecognized tax benefits Randolph Inc. took a recent tax position related to a tax deduction of $250,000 on a research and development project. The company had uncertainty about the classification of some costs associated with the project. Randolph determined that this position is more likely than not to be sustained in any future investigation by taxing authorities. Using available information, Randolph Inc. created the following summary of probabilities of sustaining the tax position. Required a. Assuming taxable income of $1,000,000 (with the research and development tax deduction taken) and a tax rate of 25%, record the income tax journal entry for the year. Assume Randolph has no temporary differences between GAAP and taxable income. b. Next year, assume the full benefit is realized, record the journal entry required. c. Assume instead that next year the full benefit is lost, record the journal entry required
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