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The following information is from Richards Refrigeration, Inc.It is related to: As of 31 December 2021, the following temporary differences exist between the carrying values
The following information is from Richards Refrigeration, Inc. It is related to:
- As of 31 December 2021, the following temporary differences exist between the carrying values of the financial statements and their tax bases:
(in millions of dollars) | |||||||||||
Book Value | tax base | Future Taxable (Deductible) Amount | |||||||||
Buildings and equipment (after deducting accumulated depreciation) | $ | 158 | $ | 109 | $ | 49 | |||||
prepaid insurance | 69 | 0 | 69 | ||||||||
Liability—probability of loss | 44 | 0 | (44 | ) | |||||||
- At the beginning of 2021, there were no temporary differences.
- For the year ended December 31, 2021, pre-tax accounting income was $219 million and taxable income was $145 million. The tax rate is 25%.
Required:
1. Fill in the table given below and prepare the appropriate journal entry to record income taxes for 2021.
2. What is his 2021 net income?
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