On January 1, 2008, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for

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On January 1, 2008, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2010, the carrying value of the building was $30 million and its tax basis was $20 million. At December 31, 2011, the carrying value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2011 was $45 million.


Required:

1. Prepare the appropriate journal entry to record Ameen's 2011 income taxes. Assume an income tax rate of 40%.

2. What is Ameen's 2011 net income?


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Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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