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Exercise 16-2 (Static) Determine taxable income; determine prior year deferred tax amount; financial statement effects [LO16-2] On January 1, 2021, Ameen Company purchased major pieces
Exercise 16-2 (Static) Determine taxable income; determine prior year deferred tax amount; financial statement effects [LO16-2]
On January 1, 2021, 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, 2023, the book value of the equipment was $30 million and its tax basis was $20 million. At December 31, 2024, the book value of the equipment was $28 million and its tax basis was $12 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $50 million.
Required:
- Prepare the appropriate journal entry to record Ameens 2024 income taxes. Assume an income tax rate of 25%.
- What is Ameens 2024 net income?
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Will You Be My Internal Audit Manager
Authors: Benito Gross
1st Edition
B09774C8CK, 979-8521636563
