Problem:

At the end of 2012, mathis industries had a deferred tax asset account with a balance of $120 million attributable to a temporary book-tax difference of $300 million in a liability for estimated expenses. At the end of 2013, the temporary difference is $280 million. Mathis has no other temporary differences. Taxable income for 2013 is $720 million and the tax rate is 40%.

Required:

Question 1: Prepare the journal entry(s) to record Mathis's income taxes for 2013 assuming it is "more likely than not" that the deferred tax asset will be realized.

Question 2: Prepare the journal entry(s) to record Mathis's income taxes for 2013 assuming it is "more likely than not" that one-half of the deferred tax asset will not ultimately be realized.

Note: Please describe comprehensively and provide step by step solution.