Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions):RevenuesExpensesPretax accounting income (income statement)Taxable income (tax return)Tax rate: 25%2024$888760$128$ 1162025$ 980800$ 180$ 200a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2024 for $60million. The cost is tax deductible in 2024.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 2024 and 2025were $33 million and $35 million, respectively. Subscriptions included in 2024 and 2025 financial reportingrevenues were $25 million ($10 million collected in 2023 but not recognized as revenue until 2024) and $33 million,respectively. (Hint: View this as two temporary differences-one reversing in 2024; one originating in 2024.)d. 2024 expenses included a $14 million unrealized loss from reducing investments (classified as trading securities) tofair value. The investments were sold and the loss realized in 2025.e. During 2023, accounting income included an estimated loss of $6 million from having accrued a loss contingency.The loss was paid in 2024, at which time it is tax deductible.f. At January 1, 2024, Arndt had a deferred tax asset of $4 million and no deferred tax liability.6. Suppose that during 2025, tax legislation was passed that will lower Arndt's effective tax rate to 1% beginning in 2026. Prepare aschedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare thenecessary journal entry to record income taxes for 2025.HNoxt

To reconcile the difference between pretax accounting income and taxable income for 2025 and to…

Answered: 6. Suppose that during 2025, tax…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 47P

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Rhodes Corporations financial statements are shown after part f. Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2020? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2020? e. What is the ROIC for 2020? f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
Consider the following accounts and determine if the account is a current liability, a noncurrent liability, or neither. A. cash B. federal income tax payable this year C. long-term note payable D. current portion of a long-term note payable E. note payable due in four years F. interest expense G. state income tax
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues. Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $888 760 $128 $116 a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2024 for $60 million. The cost is tax deductible in 2024. Answer is complete but not entirely correct. Deferred tax amounts ($ in millions) Classification Net noncurrent deferred tax asset ✔ $ Net noncurrent deferred tax liability X $ 2025 $980 800 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 2024 and 2025 were $33 million and $35 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $25 million ($10 million collected in 2023 but not recognized as revenue until 2024) and $33 million,…
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2025 $ 1,020 840 $180 $ 214 Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $928 784 $144 $ 116 a. Expenses each year include $46 million from a two-year casualty insurance policy purchased in 2024 for $92 million. The cost is tax deductible in 2024. 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 2024 and 2025 were $47 million and $63 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $41 million ($24 million collected in 2023 but not recognized as revenue until 2024) and $47 million, respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $30 million unrealized loss from…
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $ 940 796 $ 144 $ 104 2025 $ 1,032 852 a. Expenses each year include $58 million from a two-year casualty insurance policy purchased in 2024 for $116 million. The cost is tax deductible in 2024. $ 180 $ 214 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 2024 and 2025 were $59 million and $75 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $53 million ($36 million collected in 2023 but not recognized as revenue until 2024) and $59 million, respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $42 million unrealized loss from…
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2025 $ 1,024 844 $180 $ 214 Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $932 788 a. Expenses each year include $50 million from a two-year casualty insurance policy purchased in 2024 for $100 million. The cost is tax deductible in 2024. $144 $ 112 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 2024 and 2025 were $51 million and $67 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $45 million ($28 million collected in 2023 but not recognized as revenue until 2024) and $51 million, respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $34 million unrealized loss from…
S Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2024 $932 788 $ 144 $ 112 Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2025 $ 1,024 844 $ 180 $ 214 a. Expenses each year include $50 million from a two-year casualty insurance policy purchased in 2024 for $100 million. The cost is tax deductible in 2024. 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 2024 and 2025 were $51 million and $67 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $45 million ($28 million collected in 2023 but not recognized as revenue until 2024) and $51 million, respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $34 million unrealized loss…
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 888 $ 980 Expenses Pretax accounting income (income statement) Taxable income (tax return) 760 800 $ 128 $ 116 $ 180 $ 200 Tax rate: 25% a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 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 $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $14 million unrealized loss from reducing…
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 888 $ 980 Expenses 760 800 Pretax accounting income (income statement) $ 128 $ 180 Taxable income (tax return) $ 116 $ 200 Tax rate: 25% Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 million. The cost is tax deductible in 2021. Expenses include $2 million insurance premiums each year for life insurance on key executives. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint: View this as two temporary differences—one reversing in 2021; one originating in 2021. 2021…
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 888 $ 980 Expenses 760 800 Pretax accounting income (income statement) $ 128 $ 180 Taxable income (tax return) $ 116 $ 200 Tax rate: 25% Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 million. The cost is tax deductible in 2021. Expenses include $2 million insurance premiums each year for life insurance on key executives. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint: View this as two temporary differences—one reversing in 2021; one originating in 2021. 2021…
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 888 $ 980 Expenses 760 800 Pretax accounting income (income statement) $ 128 $ 180 Taxable income (tax return) $ 116 $ 200 Tax rate: 25% Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 million. The cost is tax deductible in 2021. Expenses include $2 million insurance premiums each year for life insurance on key executives. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint: View this as two temporary differences—one reversing in 2021; one originating in 2021. 2021…
Consider the following data for 2021 from an after tax cash flow analysis. What is the taxable income for 2021? Before-Tax-and-Loan = $23,000 Loan Principal Payment = $3,203 Loan Interest Payment = $3,877 Depreciation Deduction = $12,490 Taxes Due = $1,658. After-Tax Cash Flow = $14,262. a. $40,000 b. $35,540 c. $6,633 d. $28,460.

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