On January 1, 2021. Ameen Company purchased major pieces of manufacturing equipment for a total of $70 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book value of the equipment was $64 million and its tax basis was $54 million. At December 31, 2024, the book value of the equipment was $62 million and its tax basis was $47 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $35 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2024 net income?
Q: sh
A: The objective of this question is to prepare the journal entries for Outdoor Equipment (OE) for the…
Q: Gurland Valves Company manufactures brass valves that meet precise specification standards. All…
A: Activity-Based Costing (ABC) is a costing methodology that assigns overhead costs to specific…
Q: Crane Inc. presented the following data. Net income $2,354,580 Preferred stock: 45,000 shares…
A: It represents the portion of a company's profit allocated to each outstanding share of common stock.…
Q: $ 222,000 2,220,000 23,200 199,800 333,000 44,400 49,950 17,200 11,100 33,300 60,500 27,200 46,400…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: Lobster Trap Company is considering automating its manufacturing facility. Company information…
A: Break even Sales -The break-even point (BEP) or break-even level represents the sales amount—in…
Q: 1. Bongo Drumz Inc had the following pattern of sales for the months indicated: Sales Nov $48,000…
A: The objective of the question is to calculate the total cash receipts for the months of January,…
Q: D E F G (Deferred Tax Asset with and without Valuation Account) Nova Sci, Inc. has a deferred tax…
A: TaxThe amount of money paid by the government on the income or gains earned by a company or…
Q: You are hired as a consultant to decide if your client should purchase a new, highly specialized…
A: It is the process of making decisions that involve the management of costs in order to achieve…
Q: Required information [The following information applies to the questions displayed below.] Morganton…
A: Estimated production units in July is 14,500 unitsExplanation:
Q: Inventory information for Part 311 of Sheffield Corp. discloses the following information for the…
A: Inventory valuation is the process of determining the monetary value of ending inventory. A company…
Q: SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company's…
A: Direct labor variance occurs due to the difference between the actual cost paid for labor and the…
Q: Check my work Victoria Inc. makes one product and it provided the following information to help…
A: Budget means the expected value of future. Budget will be compared with actual value and variance is…
Q: Following are the transactions of JonesSpa Corporation, for the month of January a. Borrowed $25,000…
A: The accounting equation is a mathematical representation of financial transactions. The accounting…
Q: i need the answer quickly
A: The periodic inventory system refers to the system where the the inventory and cost of goods sold…
Q: Assume that ACW Corporation has 2022 taxable income of $1,960,000 for purposes of computing the $179…
A: Depreciation is the decrement in the value of tangible assets by the wear and tear during the…
Q: 4. If a company understated its ending inventory balance for 2022 by $5,000, and overstates its…
A: The objective of this question is to understand the impact of inventory errors on the net income of…
Q: The following facts relate to Crane Corporation. 1. Deferred tax liability, January 1, 2025,…
A: The objective of the question is to calculate the pretax financial income for Crane Corporation for…
Q: Stellar Company purchased a machine at a price of $92,700 by signing a note payable, which requires…
A: Notes are also known as promissory notes which are a sort of debt instrument stating a promise to…
Q: Maya is the owner of Myro Manufacturers. She entered into a four-year lease agreement with LUTech…
A: The objective of the question is to identify where the lease agreement between Myro Manufacturers…
Q: Munabhai
A: The objective of this question is to calculate the simple payback period and the internal rate of…
Q: The committee decided to secure a loan of $2,400,000 for the overall project. They got two offers…
A: Interest is the amount paid for taking or using money or saving money. The money taken as the loan…
Q: Oriole produces four kinds of ice cream from a single process. The total joint costs of $77,900…
A: To allocate joint costs using the sales value at split-off method, we first need to calculate the…
Q: CrazyGames Apply AA Video 20-- Dashboard F v2.cengagenow.com Print Item July. 1 Cash K. Elliot,…
A: The information provided shows a snippet of a CengageNOWv2 online learning system for accounting. It…
Q: Jackson Company had the following information for 2020: A. Common Stock Share transactions: 1/1:…
A: Journal entriesThe process of recording the day-to-day transactions of the company in the books is…
Q: Sales Revenue Less: Variable Expenses Contribution Margin Less: Fixed Expenses Operating Income 75…
A: Contribution Margin Ratio is calculated with the help of following formula Contribution Margin Ratio…
Q: iller Company's contribution format income statement for the most recent month is shown below: Total…
A: Income statement is a financial statement that shows profitability, total revenue and total expenses…
Q: 1) Required: What will be the effect of the lease on Café Med's earnings for the first year (ignore…
A: A lease is defined as a contractual agreement between two organizations where one of them provides…
Q: How can accountants reduce bad earnings? Question 8 opt
A: Accountants are specialists who measure, expose, and give assurance regarding fiscal data so that…
Q: Iron Corporation is evaluating an extra dividend versus a share repurchase. In either case, $18,000…
A: Answer:- The amount of profit an investor makes per share is shown by earnings per share. It…
Q: Fore Farms reported a pretax operating loss of $176 million for financial reporting purposes in…
A: Completed Journal Entry:Debit: Income Tax Expense ($47 million)Credit: Income Taxes Payable ($47…
Q: Durban Metal Products, Limited, of the Republic of South Africa makes specialty metal parts used in…
A: Activity-Based Costing (ABC) is a costing methodology that assigns overhead costs to specific…
Q: White Oaks Properties builds strip shopping centers and small malls. The company plans to replace…
A: A financial statistic called equivalent annual cost is used to assess an investment's or project's…
Q: Oriole Corporation had 100,800 shares of stock outstanding on January 1, 2025. On May 1, 2025,…
A: Weighted-average number of shares outstanding meaning:- The weighted average number of shares…
Q: Required information [The following information applies to the questions displayed below.] These…
A: Break-even point is a term used in business to describe the level of sales at which total revenue…
Q: Randolph is a 30 percent partner in the RD Partnership. On January 1, RD distributes $ 15,000 cash,…
A: Partnership can be defined as the agreement that is entered by two or more parties. These parties…
Q: Calculate the following from the information given Fego Ltd:1. Payback Period (expressed in years,…
A: Fego Ltd - Payback Period CalculationFego Ltd is considering Machine X with an initial investment of…
Q: Current Attempt in Progress On October 2, 2025, Crane Company sold $6,260 of its elite camping gear…
A: Taking returns and giving allowances can assist keep unsold inventory from building up since they…
Q: During the current year, the City of Plattsburgh recorded the following transactions related to its…
A: The General Fund represents the primary operating fund of a government entity, encompassing…
Q: At January 1, 2025, Ivanhoe Company had plan assets of $300,400 and a projected benefit obligation…
A: A pension is a fund into which regular contributions are made throughout a person's working career…
Q: Required: 1. Compute the amount of Direct Materials Price Variance to be prorated to Finished Goods…
A: The company incurs various expenses and tries to control the costs. The entity uses standard costing…
Q: Please don't given handwriting solution....
A: The objective of the question is to determine the cost of each piece of equipment that Crow Company…
Q: Accounting A company has total assets of $500,000, total liabilities of $200,000, and total equity…
A: The objective of the question is to calculate the company's debt-to-equity ratio. The debt-to-equity…
Q: If the gross profit of a business is lower than it was in the previous year, which one of the…
A: The profit a business makes after subtracting the expenses related to manufacturing, marketing, and…
Q: Susan files her tax return as a single person. In 2023, She had $55,850 of total income and used the…
A: The average tax rate represents the overall tax rate. It means the actual tax rate paid by taxpayer.…
Q: A city government has decided to build and operate a convention center. Identify what factors should…
A: A convention center is a large building that is designed to hold a convention where individuals and…
Q: Cornerstone Exercise 6-21 Recording Sales Transactions Mathis Company and Reece Company use the…
A: Journal entry is a record of a business transaction of a company in double entry book keeping…
Q: In the month of June, a department had 7,000 units in beginning work in process that were 90%…
A: The equivalent units are calculated on the basis of the percentage of the work completed during the…
Q: "Candy Andy” opened a candy shop in St. Lawrence Market. Andy purchases the candy in bulk…
A: The objective of this question is to record the transactions of Candy Andy's candy shop using the…
Q: Privett Company Accounts payable $30,999 Accounts receivable 74,633 Accrued liabilities 6,192 Cash…
A: Assets that can be quickly turned into cash are referred to as quick assets. They are company's most…
Q: Mustang Manufacturing Company established the following standard price and cost data: Sales price…
A: Income statement is a financial statement that shows profitability, total revenue and total…
Step by step
Solved in 5 steps with 8 images
- Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $62 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book value of the equipment was $56 million and its tax basis was $46 million. At December 31, 2024, the book value of the equipment was $54 million and its tax basis was $39 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $35 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2024 net income?Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is Ameen's 2021 net income? (Enter your answers in millions rounded to 2 decimal place (i.e., 10,000,000 should be entered as 10.00).) Net income million
- Janus Corporation purchased major pieces of manufacturing equipment on January 1, 2020 for a total of $42 million. Janus uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2022, the book value of the equipment was $36 million and its tax basis was $26 million. At December 31, 2023, the book value of the equipment was $34 million and its tax basis was $19 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2023 was $50 million.Required:1. Prepare the appropriate journal entry to record Janus’s 2023 income taxes. Assume an income tax rate of 25%.2. What is Janus’s 2023 after-tax net income?On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of \( \$ 36 \) 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 \(\$ 30 \) million. At December 31, 2024, the book value of the equipment was \(\$ 28 \) million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was \(\$ 50 \) million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of \( 25 \% \). 2. What is Ameen's 2024 net income?Several years ago, Western Electric Corp. purchased equipment for $21,000,000. Western uses straight-line depreciation for financial reporting and accelerated depreciation for tax purposes. At December 31, 2020, the carrying value of the equipment was $18,900,000 and its tax basis was $15,750,000. At December 31, 2021, the carrying value of the equipment was $16,800,000 and the tax basis was $11,550,000. There were no other temporary differences and no permanent differences. Pretax accounting income for the current year was $26,000,000. A tax rate of 25% applies to all years. Required:Prepare the 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.)
- On January 1, 2022, Gore, Inc. purchased a machine for €720,000 which will be depreciated €72,000 per year for financial statement reporting purposes. For income tax reporting, Gore elected to expense €80,000 and to use straight-line depreciation which will allow a depreciation deduction of €64,000 for 2022. Assume a present and future enacted income tax rate of 30%. What amount should be added to Gore's deferred tax liability for this temporary difference at December 31, 2022?Several years ago, Marathon Oil Corp. purchased equipment for $16,500,000. Marathon Oil uses straight-line depreciation for financial reporting and accelerated depreciation for tax purposes. At December 31, 2020, the carrying value of the equipment was $14,850,000 and its tax basis was $12,375,000. At December 31, 2021, the carrying value of the equipment was $13,200,000 and the tax basis was $9,075,000. There were no other temporary differences and no permanent differences. Pretax accounting income for the current year was $21,500,000. A tax rate of 25% applies to all years. Required:Prepare the journal entry to record Marathon Oil'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.)Ayres Services acquired an asset for $144 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset/s cost is depreciated by MACRS. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: _ ($ in millions) ____________ 2021 2022 2023 2024 Pretax accounting income $370 $390 $405 $440 Depreciation on the income statement 36 36 36 36 Depreciation on the tax return (57) (49) (23) (15) Taxable income…
- SINCO Ltd. purchased a piece of equipment in the year 2018 for the sum of $ 200,000. The company is subject to a tax depreciation rate of 25%. According to the following table, what is the depreciation allowance that this company can claim in 2020? (in the following picture : Année is year)On January 1, 2021, Roberts Company purchased major pieces of manufacturing equipment for a total of $20 million. Roberts 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 $75 million. At December 31, 2024, the book value of the equipment was $70 million. There were no other temporary differences and no permanent differences, Pretax accounting income for 2024 was $110 million. Assume an income tax rate of 20%, the amount of current income tax expenses reported on 2024 income statement would be: $24 million O $21 million O $23 million O $22 millionOn January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of $72 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 $60 million. At December 31, 2024, the book value of the equipment was $56 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $156 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.…