On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $62 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book value of the equipment was $56 million and its tax basis was $46 million. At December 31, 2024, the book value of the equipment was $54 million and its tax basis was $39 million. There were no other temporary differences and no permanent differences. Pretax accounting income 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal place (i.e., 10,000,000 should be entered as 10.00). View transaction list Journal entry worksheet 1 Record 2024 income taxes.
On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $62 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book value of the equipment was $56 million and its tax basis was $46 million. At December 31, 2024, the book value of the equipment was $54 million and its tax basis was $39 million. There were no other temporary differences and no permanent differences. Pretax accounting income 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal place (i.e., 10,000,000 should be entered as 10.00). View transaction list Journal entry worksheet 1 Record 2024 income taxes.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 4MC: Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the...
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