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A Corporation purchased major pieces of manufacturing equipment on January 1, 2020 for a total...

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Accounting

A Corporation purchased major pieces of manufacturing equipment on January 1, 2020 for a total of $50 million. A corporation 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 $44 million and its tax basis was $34 million. At December 31, 2023, the book value of the equipment was $42 million and its tax basis was $27 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 a corporation 2023 income taxes. Assume an income tax rate of 25%.

2. What is a corporation 2023 after-tax net income?

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