Arndt, Inc. reported the following for $2021$ and $2022($$ in millions$)$:

a$.$ Expenses each year include $$42$ million from a two$-$year casualty insurance policy purchased in $2021$ for

$$84$ 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 $$41$ million and $$43$ million, respectively. Subscriptions included in $2021$ and $2022$

financial reporting revenues were $$33$ million $($$$18$ million collected in $2020$ but not recognized as

revenue until $2021)$ and $$41$ million, respectively. Hint: View this as two temporary differences$-$one

reversing in $2021$; one originating in $2021.$

d$.2021$ expenses included a $$22$ 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 $$14$ million from having accrued a loss

contingency. The loss was paid in $2021,$ at which time it is tax deductible.

f$.$ At January $1,2021,$ Arndt had a deferred tax asset of $$8$ million and no deferred tax liability.

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 $($i$.$e$.,5,500,000$

should be entered as $5\mathrm{.}5).)$

Prepare the necessary journal entry to record income taxes for $2022.($If no entry is required for a transaction$/$event$,$ select

$5,500,000$ should be entered as $5\mathrm{.}5).)$ account field. Enter your answers in millions rounded to $1$ decimal place $($i$.$e$.,$

Required $1$

$$ Required $1$

Compute the deferred tax amounts that should be reported on the $2022$ baiance sheet. $($Enter your answer in millions $($i$.$e$.,$

$10,000,000$ should be entered as $10).)$

Suppose that during $2022,$ tax legislation was passed that will lower Arndt's effective tax rate to $15\%$ beginning in $2023.$

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 $($i$.$e$.,5,500,000$

should be entered as $5\mathrm{.}5).)$

Prepare the necessary journal entry to record income taxes for $2022.($If no entry is required for a transaction$/$event$,$ select $"$No journal

Prepare the necessary journal entry to record income taxes for $2022.($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 $5\mathrm{.}5).)$

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