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The information that follows pertains to Richards Refrigeration, Incorporated: At December 31, 2024, temporary differences existed between the financial statement book values and the tax bases of the following: ($ in millions)   Book Value Tax Basis Future Taxable (Deductible) Amount Buildings and equipment (net of accumulated depreciation) $ 120 $ 90 $ 30 Prepaid insurance 50 0 50 Liability-Loss contingency 25 0 (25) No temporary differences existed at the beginning of 2024. Pretax accounting income was $200 million and taxable income was $145 million for the year ended December 31, 2024. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. What is the 2024 net income?   General Journal Record 2024 income taxes Transaction                   General Journal Debit Credit 1

The information that follows pertains to Richards Refrigeration, Incorporated: At December 31, 2024, temporary differences existed between the financial statement book values and the tax bases of the following: ($ in millions)   Book Value Tax Basis Future Taxable (Deductible) Amount Buildings and equipment (net of accumulated depreciation) $ 120 $ 90 $ 30 Prepaid insurance 50 0 50 Liability-Loss contingency 25 0 (25) No temporary differences existed at the beginning of 2024. Pretax accounting income was $200 million and taxable income was $145 million for the year ended December 31, 2024. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. What is the 2024 net income?   General Journal Record 2024 income taxes Transaction                   General Journal Debit Credit 1

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 74E
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Intermediate Accounting ll ch 16

 

6. The information that follows pertains to Richards Refrigeration, Incorporated:

  1. At December 31, 2024, temporary differences existed between the financial statement book values and the tax bases of the following:

($ in millions)

  Book Value Tax Basis

Future Taxable (Deductible) Amount
Buildings and equipment (net of accumulated depreciation) $ 120 $ 90 $ 30
Prepaid insurance 50 0 50
Liability-Loss contingency 25 0 (25)

  1. No temporary differences existed at the beginning of 2024.

  2. Pretax accounting income was $200 million and taxable income was $145 million for the year ended December 31, 2024. The tax rate is 25%.

Required:

  1. Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024.
  2. What is the 2024 net income?

 

  • General Journal

Record 2024 income taxes

Transaction                   General Journal Debit Credit
1      
       
       
       
       
       

 

Required 1 Calculation General Journal Net income Required 2 What is the 2024 net income? Note: Enter your answer in millions (i.e., 5,000,000 should be entered as 5). million < General Journal Required 2
Transcribed Image Text:Required 1 Calculation General Journal Net income Required 2 What is the 2024 net income? Note: Enter your answer in millions (i.e., 5,000,000 should be entered as 5). million < General Journal Required 2
Required 1 Calculation General Journal Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Required 2 Income taxable in current year Amount (in millions) $ 200.00 X X X X X Tax Rate Required 1 Calculation = II = = || II Tax (in millions) General Journal Recorded as: >
Transcribed Image Text:Required 1 Calculation General Journal Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Required 2 Income taxable in current year Amount (in millions) $ 200.00 X X X X X Tax Rate Required 1 Calculation = II = = || II Tax (in millions) General Journal Recorded as: >
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