Question
Several years ago, Western Electric Corp. purchased equipment for $24,000,000. Western uses straight-line depreciation for financial reporting and MACRS for tax purposes. At December 31,
Several years ago, Western Electric Corp. purchased equipment for $24,000,000. Western uses straight-line depreciation for financial reporting and MACRS for tax purposes. At December 31, 2015, the carrying value of the equipment was $21,600,000 and its tax basis was $18,000,000. At December 31, 2016, the carrying value of the equipment was $19,200,000 and the tax basis was $13,200,000. There were no other temporary differences and no permanent differences. Pretax accounting income for the current year was $29,000,000. A tax rate of 35% applies to all years. |
Required: |
Prepare one journal entry to record Western's income tax expense for the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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