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Tom [10]
2 years ago
13

Arnold industries has pretax accounting income of $32 million for the year ended december 31, 2021. The tax rate is 25%. The onl

y 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 $8 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 $50 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 journal entry to record arnold’s income taxes for 2022.
SAT
1 answer:
ruslelena [56]2 years ago
7 0

It can be deduced that the income taxable in the current year will be $6.0.

<h3>How to calculate the income tax payable</h3>

From the complete information, the income tax payable will be calculated thus:

  • Pretax accounting income = $32.00
  • Rent cost in 2022 = $2.0 × 25% = $.05
  • Rent cost in 2023 = $2.0 × 25% = $.05
  • Rent cost in 2024 = $2.0 × 25% = $.05
  • Rent cost in 2025 = $2.0 × 25% = $.05

Total deferred tax = $2.0

Therefore, the income taxable in the current year will be:

= $24.0 × 25%

= $24.0 × 0.25

= $6.0

Learn more about tax on:

brainly.com/question/25783927

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Debora [2.8K]

A store with a wide variety of products, usually at higher prices than discount stores is called a department store.

<h3 /><h3>What are the advantages of a department store?</h3>

As this business configuration focuses on the sale of a variety of products that are easily marketed, the greatest advantages are the variety of products that generate consumer convenience, in addition to reduced advertising costs and economies of scale.

The disadvantages of a department store are related to the need for a high amount of capital to operate the business, in addition to promoting little personal contact with the end customer. But if organizational resources are well managed, this business structure can be very profitable.

Therefore, department stores are a trade whose focus is on the sale of varied products at a more competitive price and quality service, generating convenience and reliability for the consumer.

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