Homework Answers
Solution 1:
Depreciation as per books for 2021 = $30 - $28 = $2 million
Depreciation as per tax for 2021 = $20 - $12 = $8 million
Taxable income = $50 + $2 - $8 = $44 million
| Journal Entries - Ameen Company (In million) | |||
| Date | Particulars | Debit | Credit |
| 31-Dec-21 | Income tax expense Dr | $12.50 | |
| To Income taxes payable ($44*25%) | $11.00 | ||
| To Deferred tax liability ($6*25%) | $1.50 | ||
| (To record income tax expense) |
Solution 2:
Ameen's 2021 net income = $50 - $12.50 = $37.50 million
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