Question
The information that follows pertains to Richards Refrigeration, Inc.: a. At December 31, 2016, temporary differences existed between the financial statement carrying amounts and the
The information that follows pertains to Richards Refrigeration, Inc.: |
a. | At December 31, 2016, temporary differences existed between the financial statement carrying amounts and the tax bases of the following: |
($ in millions) | ||||||
Carrying Amount | Tax Basis | Future Taxable (Deductible) Amount | ||||
Buildings and equipment (net of accumulated depreciation) | $ | 154 | $ | 107 | $ | 47 |
Prepaid insurance | 67 | 0 | 67 | |||
Liabilityloss contingency | 42 | 0 | (42) | |||
b. | No temporary differences existed at the beginning of 2016. |
c. | Pretax accounting income was $217 million and taxable income was $145 million for the year ended December 31, 2016. The tax rate is 35%. |
Required: |
1. | Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Negative amounts should be entered with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5)) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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2.
Journal Entry Worksheet
Record 2016 income taxes.
3.
2. | What is the 2016 net income? (Enter your answer in millions and round your answer to 1 decimal places.) |
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