Required information[The following information applies to the questions displayed below.]Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions):2025$1,010830$ 180$ 214Revenues.ExpensesPretax accounting income(income statement)Taxable income (tax return)Tax rate: 25%a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024for $72 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 2024and 2025 were $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025financial reporting revenues were $31 million ($14 million collected in 2023 but not recognized asrevenue until 2024) and $37 million, respectively. Hint: View this as two temporary differences-onereversing in 2024; one originating in 2024.d. 2024 expenses included a $20 million unrealized loss from reducing investments (classified as tradingsecurities) 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 losscontingency. The loss was paid in 2024, at which time it is tax deductible.f. At January 1, 2024, Amdt had a deferred tax asset of $6 million and no deferred tax liability.2. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using theschedule, prepare the necessary journal entry to record income taxes for 2024.Answer is not complete.Complete this question by entering your answers in the tabs below.Required Required12Prepare a schedule that reconciles the difference between pretax accounting income andtaxable income.Note: Amounts to be deducted should be indicated with a minus sign. Enter your answersin millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).($ in millions)Pretax accounting incomePermanent difference:Life insurance premiumsTemporary differences:Casualty insurance expenseSubscriptions-2023Subscriptions-2024Unrealized lossLoss contingencyTaxable incomeEnacted tax rate (%)Tax payable currentlyDeferred tax liabilityDeferred tax assetCurrentYear2024$ 144.02024$918774$ 144$ 1262.0(36.0)31.0X(20.01x(10.0)$111.019.5X)< Required 1FutureTaxableAmounts[2025]20x5.0XFutureDeductibleAmounts[2025]53.0X$ 53.0Required 2 >

Required changes in Deferred tax liability / Assets = Ending balances required - Beginning…

Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2025 $ Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $ 918 774 $ 144 $ 126 1,010 830 $ 180 $ 214 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. 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, Amdt had a deferred tax asset of $6 million and no deferred tax liability. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the hedule, prepare the necessary journal entry to record income taxes for 2024.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q