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Required: 1. Prepare the appropriate journal entry to record Ameen's 2021 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2021 net income?

Required: 1. Prepare the appropriate journal entry to record Ameen's 2021 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2021 net income?

FINANCIAL ACCOUNTING
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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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 < Required 1 Required 2 >
Transcribed Image Text: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 < Required 1 Required 2 >
On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of $74 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2020, the book value of the equipment was $68 million and its tax basis was $58 million. At December 31, 2021, the book value of the equipment was $66 million and its tax basis was $51 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2021 was $45 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2021 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2021 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 2021 income taxes. Assume an income tax rate of 25%. (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 2021 income taxes. Note: Enter debits before credits. Event 1 Record entry General Journal Clear entry Debit Credit View general journal >
Transcribed Image Text:On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of $74 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2020, the book value of the equipment was $68 million and its tax basis was $58 million. At December 31, 2021, the book value of the equipment was $66 million and its tax basis was $51 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2021 was $45 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2021 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2021 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 2021 income taxes. Assume an income tax rate of 25%. (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 2021 income taxes. Note: Enter debits before credits. Event 1 Record entry General Journal Clear entry Debit Credit View general journal >
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