Arndt, Incorporated reported the following for $2024$ and $2025($$ in millions$)$:

$20242025$

Revenues $ $938$ $ $1,030$

Expenses $794850$

Pretax accounting income $($income statement$)$ $ $144$ $ $180$

Taxable income $($tax return$)$ $ $106$ $ $214$

Tax rate: $25\%$

Expenses each year include $$56$ million from a two$-$year casualty insurance policy purchased in $2024$ for $$112$ million. The cost is tax deductible in $2024.$

Expenses include $$2$ million insurance premiums each year for life insurance on key executives.

Arndt sells one$-$year subscriptions to a weekly journal. Subscription sales collected and taxable in $2024$ and $2025$ were $$57$ million and $$73$ million, respectively. Subscriptions included in $2024$ and $2025$ financial reporting revenues were $$51$ million $($$$34$ million collected in $2023$ but not recognized as revenue until $2024)$ and $$57$ million, respectively. Hint: View this as two temporary differences$$one reversing in $2024$; one originating in $2024.$

$2024$ expenses included a $$40$ million unrealized loss from reducing investments $($classified as trading securities$)$ to fair value. The investments were sold and the loss realized in $2025.$

During $2023,$ accounting income included an estimated loss of $$30$ million from having accrued a loss contingency. The loss was paid in $2024,$ at which time it is tax deductible.

At January $1,2024,$ Arndt had a deferred tax asset of $$16$ million and no deferred tax liability.

$6.$ Suppose that during $2025,$ tax legislation was passed that will lower Arndt$$s effective tax rate to $15\%$ beginning in $2026.$ Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the nessary jpurnal entry to record income taxes for $2025.$

Required $1$

Suppose that during $2025,$ tax legislation was passed that will lower Arndt's effective tax rate to $15\%$ beginning in $2026.$

Prepare a schedule that reconciles the difference between pretax accounting income and taxable income.

Note: 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 $5\mathrm{.}5).$

Journal entry worksheet

Record $2025$ income taxes,

Note: Entar debba bofurs credita.

Suppose that during $2025,$ tax legislation was passed that will lower Arndt$$s effective tax rate to $15\%$ beginning in $2026.$ Prepare a schedule that reconciles the difference between pretax accounting income and taxable income.

Note: 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 $5\mathrm{.}5).$