On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $48 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 $42 million and its tax basis was $32 million. At December 31, 2024, the book value of the equipment was $40 million and its tax basis was $25 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $30 million. Required: Prepare the appropriate journal entry to record Ameen’s 2024 income taxes. Assume an income tax rate of 25%. What is Ameen’s 2024 net income?

7. Several years ago, Pentair purchased equipment for $23,500,000. Pentair uses straight-line depreciation for financial reporting and accelerated depreciation for tax purposes. At December 31, 2020, the carrying value of the equipment was $21,150,000 and its tax basis was $17,625,000. At December 31, 2021, the carrying value of the equipment was $18,800,000 and the tax basis was $12,925,000. There were no other temporary differences and no permanent differences. Pretax accounting income for the current year was $28,500,000. A tax rate of 25% applies to all years. Required:Prepare the journal entry to record Pentair's income tax expense for the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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Question 4 On July 1, 2022, Pepperpot Company made a lump sum purchase of an office building, including the land and some fixtures, for cash of $550,000. The tax assessments for the past year reflected the following: Land, $48,000; Building, $168,000; and Fixtures, $24,000. Pepperpot believes they will use the building for another 20 years at which time they expect to sell it of $45,000. The fixtures only have a five year life and Pepperpot expects they will have a residual value of $2,000 when they are sold. Pepperpot depreciates their real estate holdings on a straight line basis. All fixtures are depreciated using declining balance method. a. b. c. Prepare the journal entry to record the acquisition. Show your work. Prepare any year end adjustments required. Show how the assets will be presented on the December 31, 2022 financial statements.

B. If Flint prepares financial statements in accordance with ASPE, what is the recoverable amount of the equipment at November 30, 2023? Recoverable amount $

Depreciation as a Tax Shield The term tax shield refers to the amount of income tax saved by deducting depreciation for income tax purposes. Assume that Supreme Company is considering the purchase of an asset as of January 1, 2017. The cost of the asset with a five-year life and zero residual value is $123,300. The company will use the straight-line method of depreciation. Supreme's income for tax purposes before recording depreciation on the asset will be $46,900 per year for the next five years. The corporation is currently in the 30% tax bracket. Required: Calculate the amount of income tax that Supreme must pay each year if the asset is and is not purchased. 1. Amount of taxes paid if asset is not purchased is: $fill in the blank 1 2a. Amount of depreciation if asset is purchased is: $fill in the blank 2 b. Amount of taxes paid if asset is purchased is: $fill in the blank 3 3. What is the amount of the depreciation tax shield? $fill in the blank 4

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Hypothetical Corporation incurred the following expenses:                                                    2019         2020Research and Development    619,000    703,000 The new product will be available for sale July 1, 2021.   Calculate the deduction for R&D expenses for 2019, 2020, and 2021 under the following independent assumptions:a. Armando Corporation elects to expense the R&D expenses. b. Armando Corporation elects to amortize the R&D expenses over 60 months.