Chapter 16, Problem 16.19E

Multiple temporary differences; record income taxes

• LO16–6

The information that follows pertains to Richards Refrigeration, Inc.:

1. a. At December 31, 2018, temporary differences existed between the financial statement carrying amounts and the tax bases of the following ($ in millions):

1. b. No temporary differences existed at the beginning of 2018.
2. c. Pretax accounting income was $200 million and taxable income was $145 million for the year ended December 31, 2018. The tax rate is 40%.

Required:

1. 1. Determine the amounts necessary to record income taxes for 2018, and prepare the appropriate journal entry.
2. 2. What is the 2018 net income?