On January 1, 2021, Roberts Company purchased major pieces of manufacturing equipment for a total of $10 million. Roberts uses straight-line depreciation for financial statement reporting and deducted 100% of the equipment's cost for income tax reporting in 2021. At December 31, 2023, the book value of the equipment was $75 million. At December 31, 2024, the book value of the equipment was $70 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $110 million. Assume an income tax rate of 20 %, the amount of current income tax expenses reported on 2024 income statement would be: O $24 million O $21 million O $23 million O $22 million

On January 1, 2021, Roberts Company purchased major pieces of manufacturing equipment for a total of $10 million. Roberts uses straight-line depreciation for financial statement reporting and deducted 100% of the equipment's cost for income tax reporting in 2021. At December 31, 2023, the book value of the equipment was $75 million. At December 31, 2024, the book value of the equipment was $70 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $110 million. Assume an income tax rate of 20 %, the amount of current income tax expenses reported on 2024 income statement would be: O $24 million O $21 million O $23 million O $22 million

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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Oriole Company purchased equipment that cost $2595000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a 9-year life and a $103800 residual value. Oriole uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Oriole is subject to a 30% tax rate. Oriole’s net income for the year ended December 31, 2020, was understated by $2595000. $2318200. $1816500. $1622740.
The Catherine Company, effective January 1, 2020, made the following accounting change: Catherine changed its depreciation method from double-declining-balance to the straight-line method on equipment purchased on January 1, 2018, at a cost of $400,000. The equipment had an estimated useful life of five years and a $30,000 residual value. Catherine is subject to an income tax rate of 30% and can justify the changes. Required:a. Calculate the 2020 depreciation expense.$fill in the blank 1 b. Calculate the the December 31, 2020, accumulated depreciation balance on the equipment.
On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $ \$ 36 $ million. Ameen uses straight-line depreciation for financial statement reporting and deducted 100 % of the equipment's cost for income tax reporting in 2021. At December 31, 2023, the book value of the equipment was $\$ 30 $ million. At December 31, 2024, the book value of the equipment was $\$ 28 $ million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $\$ 50 $ 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 What is Ameen's 2021 net income? (Enter your answers in millions rounded to 2 decimal place (i.e., 10,000,000 should be entered as 10.00).) Net income million