On January 1, 2021, 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 equipment’s cost for income tax reporting in 2021. At December 31, 2023, the book value of the equipment was $45 million

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Chapter8: Current And Contingent Liabilities
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Intermediate Accounting ll ch 16

On January 1, 2021, 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 equipment’s cost for income tax reporting in 2021. At December 31, 2023, the book value of the equipment was $45 million. At December 31, 2024, the book value of the equipment was $42 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $72 million.

Required:

  1. Prepare the appropriate journal entry to record Ameen’s 2024 income taxes. Assume an income tax rate of 20%.
  2. What is Ameen’s 2024 net income?

 

 

Required 1
Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 20%.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in
millions rounded to 1 decimal place (i.e., 10,100,000 should be entered as 10.1).
Required 2
View transaction list
Journal entry worksheet
1
Record 2024 income taxes.
Note: Enter debits before credits.
Event
1
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Transcribed Image Text:Required 1 Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 20%. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 10,100,000 should be entered as 10.1). Required 2 View transaction list Journal entry worksheet 1 Record 2024 income taxes. Note: Enter debits before credits. Event 1 Record entry General Journal Clear entry Debit Credit View general journal
Required 1 Required 2
What is Ameen's 2024 net income?
Note: Enter your answers in millions rounded to 1 decimal place (i.e., 10,100,000 should be entered as 10.1).
Net income
million
< Required 1
Required 2
>
Transcribed Image Text:Required 1 Required 2 What is Ameen's 2024 net income? Note: Enter your answers in millions rounded to 1 decimal place (i.e., 10,100,000 should be entered as 10.1). Net income million < Required 1 Required 2 >
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