Prepare journal entry to record Arnold income taxes

Assignment Help Accounting Basics

Reference no: EM132729104

Question - Arnold Industries has pretax accounting income of $144 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 $120 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. 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 $190 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. Prepare the appropriate journal entry to record Arnold's income taxes for 2022.

Reference no: EM132729104

Questions Cloud

How culture and gender dynamics can impact communication : Explain how culture, language, and gender dynamics can impact communication when working with vulnerable clients, particularly those dealing with issues Abiha.

Explain an increase or decrease in gross profit margin : Explain an increase or decrease in gross profit margin. In your discussion, explain how a company could have a decreasing gross profit margin

Suggest reasons for differences in operating profitability : Rank-order these firms in terms of their long-term liquidity risk. Do any of these firms appear unduly risky as of the end of fiscal 2018? Explain.

How much in self-employment taxes will Atlas be deduct : Atlas earned $17,300 from his sole proprietorship in 2020. How much in self-employment taxes will Atlas be able to deduct as a for AGI deduction

Prepare journal entry to record Arnold income taxes : Prepare the appropriate journal entry to record Arnold's income taxes for 2022. Pretax accounting income was $190 million for the year ended December 31, 2022

Describe ways homelessness is treated as a crime : In the DVD Exercise "Homeless in Paradise," homelessness is treated as a crime in one U.S. city. Using a minimum of eight (8) sentences and two (2) anthropology

Phases in lenore walker cycle of violence : Explain how long-term abuse affect women and trans*people. Identify and describe the phases in Lenore Walker's cycle of violence.

Yield curves and the term structure of interest rates : Define the relationship between yield curves and the term structure of interest rates.

What would be the total amount of costs assigned to job : Refer to Solidwood Corporation. Suppose one-half of Job X4A was sold for $10,000. What would be the total amount of costs assigned to Job X4A?

User Account

All Pages