6. Suppose that during 2022, tax legislation was passed that will lower Arndt's effective tax rate to 15% beginning in 2023. Pr schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare necessary journal entry to record income taxes for 2022. × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the necessary journal entry to record 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 (i.e., 5,500,000 should be entered as 5.5).) 1 No Transaction General Journal 1 Income tax expense Deferred tax liability Income tax payable Deferred tax asset Debit Credit 40.0 × 13.5 53.5 12.4 Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): Revenues Expenses 2021 $ 936 2022 $1,028 792 848 Pretax accounting income (income statement) Taxable income (tax return) $ 144 $ 108 $ 180 $ 214 Tax rate: 25% a. Expenses each year include $54 million from a two-year casualty insurance policy purchased in 2021 for $108 million. The cost is tax deductible in 2021. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $55 million and $71 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $49 million ($34 million collected in 2020 but not recognized as revenue until 2021) and $55 million, respectively. Hint. View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $38 million unrealized loss from reducing 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 $28 million from having accrued a loss contingency. The loss was paid in 2021, at which time it is tax deductible. f. At January 1, 2021, Arndt had a deferred tax asset of $4 million and no deferred tax liability. Problem 16-8 Part 6 6. Suppose that during 2022, tax legislation was passed that will lower Arndt's effective tax rate to 15% beginning in 2023. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2022.

6. Suppose that during 2022, tax legislation was passed that will lower Arndt's effective tax rate to 15% beginning in 2023. Pr schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare necessary journal entry to record income taxes for 2022. × Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the necessary journal entry to record 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 (i.e., 5,500,000 should be entered as 5.5).) 1 No Transaction General Journal 1 Income tax expense Deferred tax liability Income tax payable Deferred tax asset Debit Credit 40.0 × 13.5 53.5 12.4 Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): Revenues Expenses 2021 $ 936 2022 $1,028 792 848 Pretax accounting income (income statement) Taxable income (tax return) $ 144 $ 108 $ 180 $ 214 Tax rate: 25% a. Expenses each year include $54 million from a two-year casualty insurance policy purchased in 2021 for $108 million. The cost is tax deductible in 2021. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $55 million and $71 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $49 million ($34 million collected in 2020 but not recognized as revenue until 2021) and $55 million, respectively. Hint. View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $38 million unrealized loss from reducing 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 $28 million from having accrued a loss contingency. The loss was paid in 2021, at which time it is tax deductible. f. At January 1, 2021, Arndt had a deferred tax asset of $4 million and no deferred tax liability. Problem 16-8 Part 6 6. Suppose that during 2022, tax legislation was passed that will lower Arndt's effective tax rate to 15% beginning in 2023. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2022.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 56P

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