On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $54 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 $45 million
On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $54 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 $45 million
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter15: Preparing Adjusting Entries And A Trial Balance
Section15.4: Calculating Federal Income Tax
Problem 1OYO
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Intermediate Accounting ll ch 16
On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $54 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 $45 million. At December 31, 2024, the book value of the equipment was $42 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $72 million.
Required:
- Prepare the appropriate
journal entry to record Ameen’s 2024 income taxes. Assume an income tax rate of 20%. - What is Ameen’s 2024 net income?
Transcribed Image Text:Required 1
Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 20%.
Note: 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 1 decimal place (i.e., 10,100,000 should be entered as 10.1).
Required 2
View transaction list
Journal entry worksheet
1
Record 2024 income taxes.
Note: Enter debits before credits.
Event
1
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Transcribed Image Text:Required 1 Required 2
What is Ameen's 2024 net income?
Note: Enter your answers in millions rounded to 1 decimal place (i.e., 10,100,000 should be entered as 10.1).
Net income
million
< Required 1
Required 2
>
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