On January 1, 2021. Ameen Company purchased major pieces of manufacturing equipment for a total of $70 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 $64 million and its tax basis was $54 million. At December 31, 2024, the book value of the equipment was $62 million and its tax basis was $47 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?

On January 1, 2021. Ameen Company purchased major pieces of manufacturing equipment for a total of $70 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 $64 million and its tax basis was $54 million. At December 31, 2024, the book value of the equipment was $62 million and its tax basis was $47 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?

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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