Question

1. Pretax accounting income was $41 million for the year ended December 31, 2018.    2. Tax depreciation exceeds book depreciation by $30 million in 2018 for the business complex           acquired that year. This amount is scheduled to be $60 million in 2019 and to reverse as           ($50 million) and ($40 million) in 2020 and 2021, respectively.    3. Insurance of $9 million was paid in 2018 for 2019 coverage.    4. A $6 million loss contingency was accrued in 2018, to be paid in 2020.No temporary differences existed at the beginning of 2018.  The tax rate is 40%.Required:1) Determine the taxable for 2018.2) Prepare the appropriate journal entry for 2018.3) What is the 2018 net income?         acquired that year. This amount is scheduled to be $60 million in 2019 and to reverse as           ($50 million) and ($40 million) in 2020 and 2021, respectively.    3. Insurance of $9 million was paid in 2018 for 2019 coverage.    4. A $6 million loss contingency was accrued in 2018, to be paid in 2020.No temporary differences existed at the beginning of 2018.  The tax rate is 40%.Required:1) Determine the taxable for 2018.2) Prepare the appropriate journal entry for 2018.3) What is the 2018 net income?    1. Pretax accounting income was $41 million for the year ended December 31, 2018.         acquired that year. This amount is scheduled to be $60 million in 2019 and to reverse as           ($50 million) and ($40 million) in 2020 and 2021, respectively.    3. Insurance of $9 million was paid in 2018 for 2019 coverage.    4. A $6 million loss contingency was accrued in 2018, to be paid in 2020.No temporary differences existed at the beginning of 2018.  The tax rate is 40%.Required:1) Determine the taxable for 2018.2) Prepare the appropriate journal entry for 2018.3) What is the 2018 net income?