Lance Lawn Services reports bad debt expense using the allowance method

E 16-5 Temporary difference; future deductible amounts; taxable income given

Lance Lawn Services reports bad debt expense using the allowance method. For tax purposes, the expense is deducted when accounts prove uncollectible (the direct write-off method). At December 31, 2011, Lance has accounts receivable and an allowance for uncollectible accounts of $20 million and $1 million, respectively, and taxable income of $75 million. At December 31, 2010, Lance reported a deferred tax asset of $435,000 related to this difference in reporting bad debts, its only temporary difference. The enacted tax rate is 40% each year.

Required:
Prepare the appropriate journal entry to record Lance's income tax provision for 2011.

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