Arndt, Inc. reported the following for 2021 and 2022 ($ in millions):20212022Revenues$ 888$ 980ExpensesPretax accounting income (income statement)Taxable income (tax return)760800$ 128$ 116$ 180$ 200Tax rate: 25%a. Expenses each year include $30 million from a two-year casualtyinsurance policy purchased in 2021 for $60 million. The cost is taxdeductible in 2021.b. Expenses include $2 million insurance premiums each year for lifeinsurance on key executives.c. Arndt sells one-year subscriptions to a weekly journal. Subscriptionsales collected and taxable in 2021 and 2022 were $33 million and$35 million, respectively. Subscriptions included in 2021 and 2022financial reporting revenues were $25 million ($10 million collectedin 2020 but not recognized as revenue until 2021) and $33 million,respectively. Hint View this as two temporary differences-onereversing in 2021; one originating in 2021.d. 2021 expenses included a $14 million unrealized loss fromreducing investments (classified as trading securities) to fair value.The investments were sold and the loss realized in 2022.e. During 2020, accounting income included an estimated loss of $6million from having accrued a loss contingency. The loss was paidin 2021, at which time it is tax deductible.f. At January 1, 2021, Arndt had a deferred tax asset of $4 million andno deferred tax liability.4. Prepare a schedule that reconciles the difference between pretax accountingincome and taxable income. Using the schedule, prepare the necessary journal entryto record income taxes for 2022.Complete this question by entering your answers in the tabs below.Required 1Required 2

Taxable income refers to the sum value of money gained by an entity on which the authorized…

Answered: accounting income (income sta eincome…

accounting income (income sta eincome (tax return) : 25% s each year include $30 million fro e policy purchased in 2021 for $60 e in 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

4. The following information is for Z Corp's first year of operations. Amounts are in millions of dollars. The enacted tax rate is 25%. Accounting income Temporary differences: Rental Income Depreciation Expense Permanent Difference: Taxable income Year 2021 $80 6 -12 2 $76 Future Taxable Amounts 2022 2023 88 75 0 -4 $4 $3 2024 2025 63 58 Future Amount Total -1 -1 -6 $3 $2 $ 12 Required: Prepare the journal entries to record the income tax expense for each year. (show the computing process and precise journal entries)
From the following details, calculate interest coverage ratio: Net Profit after tax $ 60,000; IS% Long-term debt 10,00,000; and Tax rate 40%.
Current Attempt in Progress Wildhorse Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $129,000 94,000 (302,000) 221,000 Tax Rate 25 % 25 % 30 % 30 % The tax rates listed were all enacted by the beginning of 2021. Wildhorse reports under the ASPE future income taxes method.
In 2019, Beta had an annual effective tax rate of 20%. In the 2020 first quarter, the company would pay tax at 25% just for that quarter alone. Beta management estimates that the 2020 full year effective tax rate will be 15%. Based on a first quarter 2020 income before tax of $200,000 what amount of provision for income taxes should be accrued under the integral method. a. $50,000 b. $40,000 c. $60,000 d. $0 e. $30,000
Please do not give image format
Twice KPOP Company disclosed the following information on December 31, 2021: SSS payable P20,000 Notes Payable P40,000 Deferred tax liability P10,000 Notes payable due to bank, 12% interest bearing note payable yearly,issued on August 31, 2021, maturing on August 31, 2022 P1,000,000 Mortgage payable, issued on March 1, 2012, maturing after 10 years P1,500,000 Accounts receivable, after deducting credit balances of customers’accounts amounting to ₱42, 500 P150,000 Required: Compute for the Current liabilities as of December 31, 2021
on Dec,31 the net income is $20,000, interest expense is $5,000. The interest coverage ration is (Ignore tax by assuming tax is zero)) O a. 25% O b. 4 O c. 5 O d. 20%
Carla Vista Company’s 2025 financial statements contain the following selected data: Income taxes $39000 Interest expense 25000 Net income 61000 Carla Vista’s times interest earned for 2025 is Select answer from the options below 3.4 times. 2.4 times. 5.0 times. 4.0 times.
.
During 2020, Marigold Co.’s first year of operations, the company reports pretax financial income at $247,300. Marigold’s enacted tax rate is 45% for 2020 and 20% for all later years. Marigold expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows. Future Years 2021 2022 2023 2024 2025 Total Future taxable (deductible) amounts: Installment sales $33,800 $33,800 $33,800 $101,400 Depreciation 5,800 5,800 5,800 $5,800 $5,800 29,000 Unearned rent (47,000) (47,000) (94,000) Complete the schedule below to compute deferred taxes at December 31, 2020. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)…
A note payable of $60,000, 90-day, 8% was issued on November 1, 2020. What is the amount of the accrued interest on Deconnber 31, 20207 OA S400 OB. 5600 OC S1200 OD. $800
Received rent from ruck in 2019 $87,000 Municipal bond income $111,000 Depreciation for tax purposes in excess of book depreciation $51,000 Installment sales profit to be taxed in 2019 $153,000 Tubom had pre tax accounting income of $1,800,000 and a tax rate of 30% in 2018, its first year of operations. For 2018, what is the amount of income taxes payable?