9 Part 2 of 6 709 Pr 10 References Required information [The following information applies to the questions displayed below) Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $900 $ 988 Expenses Pretax accounting income (income statement) Taxable income (tax return) 768 804 $140 $184 $122 $206 Tax rate: 25% Save & Ext Submit a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2021 for $72 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 $37 million and $39 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $29 million ($14 million collected in 2020 but not recognized as revenue until 2021) and $37 million, respectively. Hint View this as two temporary differences-one reversing in 2021; one originating in 2021 d. 2021 expenses included a $18 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold and the loss realized in 2022. e. During 2020, accounting income included an estimated loss of $10 million from having accrued a loss contingency. The loss was paid in 2021, at which time it is tax deductible. At January 1, 2021, Arndt 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 the schedule, prepare the necessary journal entry to record income taxes for 2021. Check my work Part 2 of 5 7.69 points Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (ie., 5,500,000 should be entered as 5.5).)) Current (in millions) Year 2021 Future Taxable Amounts (2022) Future Deductible Amounts [20221 Protax accounting income $ 140.0 Permanent difference Life insurance premiums 201 0 Temporary differences Casualty insurance expense (30.0) O 36.00 00 Subscriptions-2020 0 00 Subscriptions-2021 Unrealized loss 18.0 09 Loss contingency Taxable income $124.0 36.0 $ Enacted tax rate (%) 25.0% O 25.0% 0.0 25.0% 30.5 Tax payable currently 0.0 Deferred tax liability 0.0 Deferred tax asset Required 2 > Prepare the necessary journal entry to record income taxes for 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) No Transaction General Journal Debit Credit < Required 1 Required 2