Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $21 million and taxable income of $31 million for the year ended December

image text in transcribed

image text in transcribed

image text in transcribed

Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $21 million and taxable income of $31 million for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows: 2022 2023 2024 2025 $2 million 1 million 3 million 4 million 30% 30% 30% 25% Required: 1. Determine the amounts necessary to record Allmond's income taxes for 2021 and prepare the appropriate journal entry. 2. What is Allmond's 2021 net income? Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 G Required 2 Determine the amounts necessary to record Allmond's income taxes for 2021. (Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Enter all amounts as positive values.) Tax Rate % Tax $ Recorded as: ($ in millions) $ 21.00 Pretax accounting income Warranty costs reversing in: 2022 2023 2024 2025 Total deferred tax amount Income taxable in current year 30% = 30% 30%) = 25% $ $ 0.00 Deferred tax asset 5.25 Income tax payable $ 21.00 x 25% = Yable Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 Prepare the appropriate journal entry. (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 places (i.e., 5,500,000 should be entered as 5.50).). View transaction list View journal entry worksheet No Transaction General Journal Debit Credit Income tax expense Deferred tax asset Income tax payable Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 What is Allmond's 2021 net income? (Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).). Net income million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1-13

Authors: John Price, M. David Haddock, Michael Farina

15th Edition

125999516X, 9781259995163

More Books

Students also viewed these Accounting questions