Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 millionfor the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable incomeis estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted taxlegislation) are as follows:2022 $2 million2023 2 million2024 1 million20253 millionRequired:1. Determine the amounts necessary to record Allmond's income taxes for 2021 and prepare the appropriate journal entry.2. What is Allmond's 2021 net income?35%35%35%25%Complete this question by entering your answers in the tabs below.Required 1 Required 1 GJ Required 2CalculationDetermine the amounts necessary to record Allmond's income taxes for 2021. (Enter your answers in millions rounded to 2 decimalplaces (i.e., 5,500,000 should be entered as 5.50). Enter all amounts as positive values.)Tax Rate %Tax $Pretax accounting incomeWarranty costs reversing in:2022202320242025Total deferred tax amountIncome taxable in current year($ in millions)$25.00XXXXXRequired 1 Calculation|| ||===||Recorded as:Required 1 GJ > Required:1. Determine the amounts necessary to record Allmond's income taxes for 20: Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 million2. What is Allmond's 2021 net income?for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable incomeis estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted taxlegislation) are as follows:Complete this question by entering your answers in the tabs below.Required 1CalculationRequired 1 GJ Required 2Prepare the appropriate journal entry. (If no entry is required for a transaction/eaccount field. Enter your answers in millions rounded to 2 decimal places (i.e., 5View transaction list1 Record 2021 income taxes.XCr2022202320242025$2 million2 million1 million3 million35%35%35%25%Required:1. Determine the amounts necessary to record Allmond's income taxes for 2021 and prepare the appropriate journal entry.2. What is Allmond's 2021 net income?Complete this question by entering your answers in the tabs below.Required 1 Required 1 GJ Required 2CalculationWhat is Allmond's 2021 net income? (Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should beentered as 5.50).)Net incomemillion< Required 1 GJRequired 2 >

Solution: Income taxes payable = Taxable income * Tax rate Income tax expense = Income tax payable -…

Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 million for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows: 2022 $2 million 2023 2 million 2024 1 million 2025 3 million 35% 35% 35% 25% Required: 1. Determine the amounts necessary to record Allmond's income taxes for 2021 and prepare the appropriate journal entry. 2. What is Allmond's 2021 net income?

Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 million for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows: 2022 $2 million 2023 2 million 2024 1 million 2025 3 million 35% 35% 35% 25% Required: 1. Determine the amounts necessary to record Allmond's income taxes for 2021 and prepare the appropriate journal entry. 2. What is Allmond's 2021 net income?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Vishnu
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