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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