Arnold Industries has pretax accounting income of $88 million for the year ended December 31, 2024. 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, 2024. An $64 million advance rent payment at the inception of the lease is tax-deductible in 2024 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 2024. 2. Prepare the appropriate journal entry to record Arnold's income taxes for 2025. Pretax accounting income was $120 million for the year ended December 31, 2025. 3. Assume a new tax law is enacted in 2025 that causes the tax rate to change from 25% to 15% beginning in 2026. Complete the following table given below and prepare the appropriate 2015
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- Arnold Industries has pretax accounting income of $160 million for the year ended December 31, 2024. 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, 2024. An $136 million advance rent payment at the inception of the lease is tax-deductible in 2024 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term.Arnold Industries has pretax accounting income of $88 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 $64 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 $120 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…Arnold Industries has pretax accounting income of $33 million for the year ended December 31, 2018. The taxrate is 40%. The only difference between accounting income and taxable income relates to an operating lease inwhich Arnold is the lessee. The inception of the lease was December 28, 2018. An $8 million advance rent payment at the inception of the lease is tax-deductible in 2018 but, for financial reporting purposes, represents prepaidrent expense to be recognized equally over the four-year lease term.Required:1. Determine the amounts necessary to record Arnold’s income taxes for 2018, and prepare the appropriate journal entry.2. Determine the amounts necessary to record Arnold’s income taxes for 2019, and prepare the appropriate journal entry. Pretax accounting income was $50 million for the year ended December 31, 2019.3. Assume a new tax law is enacted in 2019 that causes the tax rate to change from 40% to 30% beginning in2020. Determine the amounts necessary to record Arnold’s…
- Arnold Industries has pretax accounting income of $34 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 $4 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. Required: 1. Complete the following table given below and prepare the appropriate journal entry to record Arnold's income taxes for 2018. 2. Prepare the appropriate journal entry to record Arnold's income taxes for 2019. Pretax accounting income was $42 million for the year ended December 31, 2019. 3. Assume a new tax law is enacted in 2019 that causes the tax rate to change from 40% to 30% beginning in 2020. Complete the following table given below and prepare the appropriate…Arnold Industries has pretax accounting income of $33 million for the year ended December 31, 2016. 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, 2016. An $8 million advance rent payment at the inception of the lease is tax-deductible in 2016 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term. Required: 1. Determine the amounts necessary to record Arnold’s income taxes for 2016 and prepare the appropriate journal entry. 2. Determine the amounts necessary to record Arnold’s income taxes for 2017 and prepare the appropriate journal entry. Pretax accounting income was $50 million for the year ended December 31, 2017. 3. Assume a new tax law is enacted in 2017 that causes the tax rate to change from 40% to 30% beginning in 2018. Determine the amounts necessary to record…Sheridan Company made the following journal entry in late 2021 for rent on property it leases to Danford Corporation. Cash 155000 Unearned Rent Revenue 155000 The payment represents rent for the years 2022 and 2023, the period covered by the lease. Sheridan Company is a cash basis taxpayer. Sheridan has income tax payable of $235000 at the end of 2021, and its tax rate is 25%.Assuming the income taxes payable at the end of 2022 is $260000, what amount of income tax expense would Sheridan Company record for 2022? $298750 $240625 $215625 $279375
- Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation. Cash 150,000 Unearned Rent Revenue 150,000 The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft has income tax payable of $230,000 at the end of 2025, and its tax rate is 25%. What amount of income tax expense should Kraft Company report at the end of 2025? 3) _______ A) $267,500 B) $211,250 C) $192,500 D) $117,500On January 1, 2020, Lexi Company received P250,000 representing rentals from a five-year operating lease commencing on the same date. Said amount is taxable on the year received. The pretax accounting net income for 2020 was P2,215,000 and the tax payments made in 2020 totaled P440,000. The current tax expense for 2021 is P800,000. Reflect the effects of the CREATE Law. 1. How much is the taxable income for 2020? 2. How much is the deferred tax asset as of December 31, 2020? 3. How much is the income tax expense for 2020?How much should be shown in FIVE's 2021 income statement as gross rental income? * On December 31, 2021, FIVE Corporation signed an operating lease for a warehouse with Aye Company for ten years at P30,000 per year. Upon execution of the lease, Aye paid FIVE P60,000, covering rent for the first two years. FIVE closed its books on December 31 and correctly reported P60,000 as gross rental income in its 2021 income tax return.
- On January 1, 2020, Lexi Company received P250,000 representing rentals from a five-year operating lease commencing on the same date. Said amount is taxable on the year received. The pretax accounting net income for 2020 was P2,215,000 and the tax payments made in 2020 totaled P440,000. The current tax expense for 2021 is P800,000. Reflect the effects of the CREATE Law. How much is the income tax expense for 2021? How much is the deferred tax asset as of December 31, 2022?Joferlyn corporation leased a building and received P4,000,000 annual payment on June 15, 2015. The beginning of the lease was July 1, 2015. Rental income is taxable when received. The income tax rate is 30%. The entry had no other permanent or temporary differences. What amount of deferred tax asset should be reported on December 31, 2015?Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2021, Lance has a warranty liability of $2 million and taxable income of $75 million. At December 31, 2020, Lance reported a deferred tax asset of $471,000 related to this difference in reporting warranties, its only temporary difference. The enacted tax rate is 25% each year. Required: Prepare the appropriate journal entry to record Lance's income tax provision 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 whole dollars.) View transaction list Journal entry worksheet > Record 2021 income taxes. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal