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.

$1.$ 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 $2024.$

$2.$ Compute the deferred tax amounts that should be reported on the $2024$ balance sheet.

$3.$ Prepare a schedule that reconciles the difference between pretax accounting income and taxable inco$2025.$

$4.$ Compute the deferred tax amounts that should be reported on the $2025$ balance sheet.

$5.$ 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, prepare the necessary journal entry to record income taxes for $2025.$

IMAGES OF THE REQUIREMENTS FOR EACH OF THE FIVE SECTIONS TO THIS QUESTION ARE ATTACHED BELOW. THANK YOU!

Required $1$

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 $5\mathrm{.}5).$

$\backslash$table$[[($$ in millions$),\backslash$table$[[$Current$],[$Year $2024]],\backslash$table$[[$Future Taxable$],[$Amounts $[2025]]],\backslash$table$[[$Future$],[$Deductible$],[$Amounts $[2025]]]],[$Pretax accounting income$],[$Permanent difference:$],[$Life insurance premiums$],[$Temporary differences:$],[$Casualty insurance expense$],[$Subscriptions$-2023],[$Subscriptions$-2024],[$Unrealzed loss$],[$Loss contingency$],[$Taxable income,$0\mathrm{.}0,,],[,,0\mathrm{.}0],[$Enacted tax rate $(\%)],[$Tax payable currently$],[$Deferred tax liability$],[$Deferred tax asset,,,$]]$

$\backslash$table$[[$Deferred tax amounts $($$ in millions$)],[$Classification$,$Amount$],[$Net noncurrent deferred tax asset,$],[,]]$