1 Required Information [The following information applies to the questions displayed below] Arndt, Inc reported the following for 2021 and 2022 ($ in millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2021 $936 792 $ 144 $ 108 2022 $1,028 868 $180 $ 214 a. Expenses each year include $54 million from a two-year casualty Insurance policy purchased in 2021 for $108 million The cost is tax deductible in 2021 b. Expenses include $2 million insurance premiums each year for life insurance on key executives c Amdt sells one year subscriptions to a weekly Journal. Subscription sales collected and taxable in 2021 and 2022 were $55 million and $71 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $49 million ($34 million collected in 2020 but not recognized as revenue until 2021) and $55 million, respectively. Hint View this as two temporary differences--one reversing in 2021: one originating in 2021 a. 2021 expenses included a $38 million unrealized loss from reducing investments (classified as trading securities) to falr value. The Investments were sold and the loss realized in 2022 e. During 2020, accounung Income Included an estimated loss of $28 million from having accrued a loss contingency. The loss was paldin 2021, at which time it is tax deductible 1 At January 1 2021. Arndt had a deferred tax asset of S4 million and no deferred tax liability Required: 1. Which of the five differences described in items -e are temporary and which are permanent differences? . 2022 financial reporti 534 million collected in 2020 but not recognized as revenue until 2021) and $55 millio View this as two temporary differences--one reversing in 2021; one originating in 2021. d. 2021 expenses Included a $38 million unrealized loss from reducing Investments (classified as trac value. The Investments were sold and the loss realized in 2022 e. During 2020, accounting Income Included an estimated loss of $28 million from having accrued a The loss was paid in 2021, at which time it is tax deductible. 1. At January 1, 2021, Arndt had a deferred tax asset of $4 million and no deferred tax liability ok at -nces Required: 1. Which of the five differences described in items a-e are temporary and which are permanent differences? a: Casualty insurance expense b. Life insurance premiums 0. Subscriptions d Unrealized loss on trading securities Loss contingency