On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of $54 million. Ameen uses straight-line depreciation for financial statement reporting and deducted 100% of the equipments cost for income tax reporting in 2018. At December 31, 2020, the book value of the equipment was $45 million. At December 31, 2021, the book value of the equipment was $42 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2021 was $112 million. Required: 1. Prepare the appropriate journal entry to record Ameens 2021 income taxes. Assume an income tax rate of 20%. 2. What is Ameens 2021 net income?

At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $110 million attributable to a temporary book-tax difference of $440 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $336 million. Payne has no other temporary differences. Taxable income for 2021 is $792 million and the tax rate is 25%. Payne has a valuation allowance of $44 million for the deferred tax asset at the beginning of 2021. Required: 1. Prepare the journal entry(s) to record Paynes income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Paynes income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.