Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2024 $ 918 774 $ 144 $ 126 Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2025 $ 1,010 830 a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 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 $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million, respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $20 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold and the loss realized in 2025. e. During 2023, accounting income included an estimated loss of $10 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 $6 million and no deferred tax liability. Deferred tax amounts ($ in millions) Classification et current deferred tax liability Compute the deferred tax amounts that should be reported on the 2024 balance sheet. te: Enter your answers in millions rounded to 1 de Amount place (i.e., 5,500,000 should be entered as 5.5).
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2024 $ 918 774 $ 144 $ 126 Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2025 $ 1,010 830 a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 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 $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million, respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $20 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold and the loss realized in 2025. e. During 2023, accounting income included an estimated loss of $10 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 $6 million and no deferred tax liability. Deferred tax amounts ($ in millions) Classification et current deferred tax liability Compute the deferred tax amounts that should be reported on the 2024 balance sheet. te: Enter your answers in millions rounded to 1 de Amount place (i.e., 5,500,000 should be entered as 5.5).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Required information
[The following information applies to the questions displayed below.]
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions):
2024
$918
774
2025
$ 1,010
830
Revenues
Expenses
Pretax accounting income (income
statement)
Taxable income (tax return)
Tax rate: 25%
$ 144
$126
a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 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 $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting
revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million,
respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024.
d. 2024 expenses included a $20 million unrealized loss from reducing investments (classified as trading securities) to
fair value. The investments were sold and the loss realized in 2025.
e. During 2023, accounting income included an estimated loss of $10 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 $6 million and no deferred tax liability.
Deferred tax amounts ($ in millions)
Classification
Net current deferred tax liability
Net current deferred tax liability
3. Compute the deferred tax amounts that should be reported on the 2024 balance sheet.
Note: Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Amount](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faaa72841-6b6e-4a7f-809e-4545021a6691%2F6664edca-1b48-4729-9f06-bf59056d8bed%2F6u170e7_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions):
2024
$918
774
2025
$ 1,010
830
Revenues
Expenses
Pretax accounting income (income
statement)
Taxable income (tax return)
Tax rate: 25%
$ 144
$126
a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 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 $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting
revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million,
respectively. Hint. View this as two temporary differences-one reversing in 2024; one originating in 2024.
d. 2024 expenses included a $20 million unrealized loss from reducing investments (classified as trading securities) to
fair value. The investments were sold and the loss realized in 2025.
e. During 2023, accounting income included an estimated loss of $10 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 $6 million and no deferred tax liability.
Deferred tax amounts ($ in millions)
Classification
Net current deferred tax liability
Net current deferred tax liability
3. Compute the deferred tax amounts that should be reported on the 2024 balance sheet.
Note: Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Amount
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education