3*4
Arnold Industries has pretax accounting income of $46 million for the year ended December 31, 2018. The tax rate is 40%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2018. An $16 million advance rent payment at the inception of the lease is tax-deductible in 2018 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term Complete the following table given below to record Arnold's income taxes for 2018. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) ($ in millions) Tax Rate % Tax S Recorded as: Pretax accounting income 46.0 Rent costs reversing in: 2019 2020 2021 X 2022 0.0 Deferred tax liability Total deferred tax amount S Income taxable in current year Income tax payable 46.0 II xx Prepare the appropriate journal entry to record Arnold's income taxes for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e.., 5,500,000 should be entered as 5.5).) View transaction list View journal entry worksheet General Journal No Event Debit Credit Income tax expense 1 Deferred tax liability Income tax payable Prepare the appropriate journal entry to record Arnold's income taxes for 2019. Pretax accounting income was $53 million for the year ended December 31, 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e, 5,500,000 should be entered as 5.5).) View journal entry works heet View transaction list .u General Journal Credit No Event Debit Income tax expense 1 Deferred tax liability Income tax payable Assume a new tax law is enacted in 2019 that causes the tax rate to change from 40% to 30% beqinning in 2020. Complete the following table given below to record Arnold's income taxes for 2019. (Enter your answers in millions rounded to 1 decimal place (i.e. 5,500,000 should be entered as 5.5).) ($ in millions) Recorded as: Tax Rate % Tax $ Temporary Difference Beginning of Year 0.0 Deferred tax liability-beginning x 0.0 Deferred tax liability-ending Temporary Difference End of Year Change in Deferred Tax account Change in deferred tax liability Income taxable in current year 0.0 Income tax payable Prepare the appropriate journal entry to record Arnold's income taxes for 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list View journal entry worksheet No Event General Journal Debit Credit 1 Income tax expense 1 Deferred tax liability Income tax payable The information that follows pertains to Richards Refrigeration, Inc. a. At December 31, 2018, temporary differences existed between the financial statement carrying amounts and the tax bases of the following: (S in millions! ure Taxable Carrying Amount $158 (Deductible) x Basis Amount $ 49 Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency $109 69 69 44 C (44) b. No temporary differences existed at the beginning of 2018. c. Pretax accounting income was $219 million and taxable income was $145 million for the year ended December 31, 2018. The tax rate is 40% Complete the following table given below to record income taxes for 2018. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Negative amounts should be entered with a minus sign.) (S in millions) Tax Tax $ Recorded as: Rate % Pretax accounting income 219.0 Permanent differences No permanent differences ncome tax Income subject to taxation 219.0 0,0 X expense Temporary Differences Deferred tax Depreciation X liability Deferred tax Prepaid insurance x liability Deferred tax Liability loss contingency X asset Income tax Income taxable in current year 219.0 X yable Prepare the appropriate journal entry to record income taxes for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5)) View transaction list View journal entry worksheet Credit No Event General Journal Debit Income tax expense Deferred tax asset Deferred tax liability Income tax payable What is the 2018 net income? (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Net income imillion Arnold Industries has pretax accounting income of $46 million for the year ended December 31, 2018. The tax rate is 40%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2018. An $16 million advance rent payment at the inception of the lease is tax-deductible in 2018 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term Complete the following table given below to record Arnold's income taxes for 2018. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) ($ in millions) Tax Rate % Tax S Recorded as: Pretax accounting income 46.0 Rent costs reversing in: 2019 2020 2021 X 2022 0.0 Deferred tax liability Total deferred tax amount S Income taxable in current year Income tax payable 46.0 II xx Prepare the appropriate journal entry to record Arnold's income taxes for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e.., 5,500,000 should be entered as 5.5).) View transaction list View journal entry worksheet General Journal No Event Debit Credit Income tax expense 1 Deferred tax liability Income tax payable Prepare the appropriate journal entry to record Arnold's income taxes for 2019. Pretax accounting income was $53 million for the year ended December 31, 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e, 5,500,000 should be entered as 5.5).) View journal entry works heet View transaction list .u General Journal Credit No Event Debit Income tax expense 1 Deferred tax liability Income tax payable Assume a new tax law is enacted in 2019 that causes the tax rate to change from 40% to 30% beqinning in 2020. Complete the following table given below to record Arnold's income taxes for 2019. (Enter your answers in millions rounded to 1 decimal place (i.e. 5,500,000 should be entered as 5.5).) ($ in millions) Recorded as: Tax Rate % Tax $ Temporary Difference Beginning of Year 0.0 Deferred tax liability-beginning x 0.0 Deferred tax liability-ending Temporary Difference End of Year Change in Deferred Tax account Change in deferred tax liability Income taxable in current year 0.0 Income tax payable Prepare the appropriate journal entry to record Arnold's income taxes for 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) View transaction list View journal entry worksheet No Event General Journal Debit Credit 1 Income tax expense 1 Deferred tax liability Income tax payable The information that follows pertains to Richards Refrigeration, Inc. a. At December 31, 2018, temporary differences existed between the financial statement carrying amounts and the tax bases of the following: (S in millions! ure Taxable Carrying Amount $158 (Deductible) x Basis Amount $ 49 Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency $109 69 69 44 C (44) b. No temporary differences existed at the beginning of 2018. c. Pretax accounting income was $219 million and taxable income was $145 million for the year ended December 31, 2018. The tax rate is 40% Complete the following table given below to record income taxes for 2018. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Negative amounts should be entered with a minus sign.) (S in millions) Tax Tax $ Recorded as: Rate % Pretax accounting income 219.0 Permanent differences No permanent differences ncome tax Income subject to taxation 219.0 0,0 X expense Temporary Differences Deferred tax Depreciation X liability Deferred tax Prepaid insurance x liability Deferred tax Liability loss contingency X asset Income tax Income taxable in current year 219.0 X yable Prepare the appropriate journal entry to record income taxes for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5)) View transaction list View journal entry worksheet Credit No Event General Journal Debit Income tax expense Deferred tax asset Deferred tax liability Income tax payable What is the 2018 net income? (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Net income imillion
