Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help with all parts. Thanks! Arnold Industries has pretax accounting income of $112 million for the year ended December 31, 2021. The tax rate
Please help with all parts. Thanks!
Arnold Industries has pretax accounting income of $112 million for the year ended December 31, 2021. The tax rate is 25%. 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, 2021. An $88 million advance rent payment at the inception of the lease is tax-deductible in 2021 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term. Required: 1. Complete the following table given below and prepare the appropriate journal entry to record Arnold's income taxes for 2021. 2. Prepare the appropriate journal entry to record Arnold's income taxes for 2022 Pretax accounting income was $150 million for the year ended December 31, 2022. 3. Assume a new tax law is enacted in 2022 that causes the tax rate to change from 25% to 15% beginning in 2023. Complete the following table given below and prepare the appropriate journal entry to record Arnold's income taxes for 2022. Complete this question by entering your answers in the tabs below. Required 1 Required 3 Calculation Required 16) Required 2 Calculation Required 3G) Complete the following table given below to record Arnold's income taxes for 2021. (Enter your answers in millions rounded to 1 decimal place (le, 5,500,000 should be entered as 5.5)) (5 in millions) Tax Rate % Tax $ Recorded as: Pretax accounting income $ 112.0 Rent costs reversing in 2022 2023 2024 2025 Total deferred tax amount Income taxable in current year X x X X For Calculation Required 1 GJ > Required 1 Calculation Required 1 GJ Required 2 Required 3 Calculation Required 3 G Prepare the appropriate Journal entry to record Arnold's income taxes for 2021. (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 (le, 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet Record 2021 Income taxes Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Required 1 Calculation Required 16 Required 2 Required 3 Calculation Required 3 G) Prepare the appropriate journal entry to record Arnold's income taxes for 2022. Pretax accounting income was $150 million for the year ended December 31, 2022. (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 Journal entry worksheet Record 2022 income taxes. Note: Enter debits before credits Transaction General Journal Debit Credit 1 Complete this question by entering your answers in the tabs below. Required 1 Required 1 GJ Required 2 Calculation Required 3 Calculation Required 3 J Assume a new tax law is enacted in 2022 that causes the tax rate to change from 25% to 15% beginning in 2023. Complete the following table given below to record Arnold's income taxes for 2022. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5,5). Amounts to be deducted should be indicated with a minus sign.) (sin millions) Tax Rate % Tax $ Recorded as: Temporary Difference - Beginning of Year X Temporary Difference - End of Year Change in Deferred Tax account Income taxable in current year X Required 1 Calculation Required 1 G Required 2 Required 3 Calculation Required 3 G) Prepare the appropriate journal entry to record Arnold's income taxes for 2022. (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 (1.e., 5,500,000 should be entered as 5.5).) View transaction list Journal entry worksheet Record 2022 income taxes. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started