Question
On January 1, 2013, Ameen Company purchased a building for $56 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax
On January 1, 2013, Ameen Company purchased a building for $56 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2015, the book value of the building was $30 million and its tax basis was $20 million. At December 31, 2016, the book value of the building was $36 million and its tax basis was $21 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2016 was $55 million. |
Required: | |
1. | Prepare the appropriate journal entry to record Ameens 2016 income taxes. Assume an income tax rate of 40%. |
2. | What is Ameens 2016 net income? |
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