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 inceptio 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 journal entry to record Arnold's income taxes for 2019. Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 3 Calculation Required 1 GJ Required 2 Required 3 GJ Complete the following table given below to record Arnold's income taxes for 2018. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) (S in millions) Tax Rate % Таx $ Recorded as: Pretax accounting income Rent costs reversing in: 34.0 2019 %3D 2020 %3D 2021 %3D 2022 %3D Total deferred tax amount Income taxable in current year < Required 1 Calculation Required 1 GJ > I ||||

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 December 31, 2022, Dodd, Inc. appropriately changed the company's method of accounting for long-term construction contracts from the percentage-of-completion method to the cost recovery method for financial statement and income tax purposes. The change will result in a €2,300,000 decrease in the beginning Construction in Process at January 1, 2022. Assume a 30% income tax rate. The cumulative effect of this accounting change on the Deferred Tax Liability account is Group of answer choices 1) a decrease of €690,000. 2) an increase of €690,000. 3) a decrease of €1,610,000. 4)an increase of €2,300,000.

At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $90 million attributable to a temporary book-tax difference of $360 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $272 million. Payne has no other temporary differences. Taxable income for 2021 is $648 million and the tax rate is 25%. Payne has a valuation allowance of $36 million for the deferred tax asset at the beginning of 2021. Required: Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.

XYZ Company manufactures equipment that are sold through installment. XYZ recognizes revenue on the year of sale for financial reporting and when installment payments are received for income tax purposes. In 2020, the company earned a gross profit of P6,000,000 for accounting and P1,500,000 for income tax purposes. In relation to its sales, XYZ also provides warranties for its equipment. Warranty costs are accrued as expense for financial reporting and recognized as deductible expense in the income tax return when paid. Accrued warranty expense for 2020 is P2,500,000, but only P500,000 of warranty costs are actually paid during the year.In addition, XYZ also earned P500,000 of interest, net of final withholding taxes, from its bank deposits. Interest income subject to final withholding taxes is non-taxable income for income tax purposes. The entity also paid P100,000 insurance premium on the life of its president in relation to an insurance policy where XYZ Company is the beneficiary.…

J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022–2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt’s income taxes for 2021 and prepare the appropriate journal entry.

At the end of 2019, its first year of operations, Beattie Company reported taxable income of $39,000 and pretax financial income of $35,000. The difference is due to the way the company handles its warranty costs. For tax purposes, Beattie deducts the warranty costs as they are paid. For financial reporting purposes, Beattie provides for a year-end estimated warranty liability based on future expected costs. Beattie is subject to a 30% tax rate for 2019, and no change in the tax rate has been enacted for future years. Based on verifiable evidence, the company decides it should establish a valuation allowance of 60% of its ending deferred tax asset.   Required: 1. Prepare Beattie’s income tax journal entry at the end of 2019. 2. Prepare the lower portion of Beattie’s 2019 income statement.

Foster Company reported pretax financial income of $350,000 for 2021. Foster uses an accelerated form of depreciation for tax purposes, and it exceeds book depreciation by $50,000. The tax rate for 2021 is 20%. Record the journal entry at the end of 2021, be sure to include calculations, as well as income tax expense, a deferred account, and income tax payable.