On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $62 million. Ameen usesstraight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book valueof the equipment was $56 million and its tax basis was $46 million. At December 31, 2024, the book value of the equipment was $54million and its tax basis was $39 million. There were no other temporary differences and no permanent differences. Pretax accountingincome for 2024 was $35 million.Required:1. Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%.2. What is Ameen's 2024 net income?

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Answered: On January 1, 2021, Ameen Company…

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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During 2021, Raines Umbrella Corporation had sales of $760,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $550,000, $90,000, and $95,000, respectively. In addition, the company had an interest expense of $94,000 and a tax rate of 21 percent. (Ignore any tax loss carryforward provisions and assume that interest is fully deductible.) a. What is the company's net income for 2021? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations.) b. What is its operating cash flow? (Do not round intermediate calculations.)
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