E 16-2 Determine taxable income; determine prior year deferred tax amount On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of $36 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 $45 million and its tax basis was $34 million. At December 31, 2021, the book value of the equipment was $42 million and its tax basis was $28 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2021 was $40 million. Required: 19. Prepare the appropriate journal entry to record Ameen's 2021 income taxes at the end of 2021. Assume an income tax rate of 25%. A. Income tax expense 10 10 10 Income tax payable (determined above) B. Income tax expense (to balance) 10 Deferred tax liability (determined above) Income tax payable (determined above) 0.75 9.25 C. Income tax expense (to balance) 10 2 Deferred tax liability (determined above) Income tax payable (determined above) 1.5 8.5 D. Income tax expense (to balance) 10 Deferred tax liability (determined above) Income tax payable (determined above) Ingyee tus payable 20. What is Ameen's 2021 net income? 1.25 8.75 A. 31.5 B. 20 C. 30 D. 38.5 onsideration During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders' equity. The articles of incorporation authorized the issue of 8 million common shares, $0.1 par per share, and 1 million preferred shares, $10 par per share. Required: Prepare the appropriate journal entries to record each transaction. 30. Feb. 13 Sold 50,000 of its common shares and 2,000 preferred shares for a total of $950,000. The fair value per share of common shares was $8. A. Cash. Common stock (par) Preferred stock 950,000 400,000 450,000 B. Cash. 950,000 Common stock 395,000 Paid-in capital excess of par, common 5,000 Preferred stock 530,000 Paid-in capital excess of par, preferred. 20,000 C. Cash..... 950,000 Common stock 5,000 Paid-in capital-excess of par, common 395,000 Preferred stock 20,000 Paid-in capital excess of par, preferred.. 530,000 D. 950,000 Cash......... Common stock and Preferred stock. 950,000 E 18-5 Issuance of shares 31. Nov. 15 Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000. A. Property, plant, and equipment (cash value) Common stock.. 3,688,000 3,688,000 B. Property, plant, and equipment (cash value). 380,000 Common stock (380,000 shares at $1 par per share).............. 380,000 C. Common stock Property, plant, and equipment (cash value)...... Property, plant, and equipment. 3,688,000 3,688,000 D. Property, plant, and equipment (cash value). Common stock. Paid-in capital excess of par (difference).... 3,688,000 38,000 3,650,000