Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

based on the information please show the calculation for subscriptions in 2023 and 2024. using the schedule, please prepare journal entries to record income taxes

based on the information please show the calculation for subscriptions in 2023 and 2024. using the schedule, please prepare journal entries to record income taxes for 2024. and show the deferred tax classification.
image text in transcribed
Required information [The following information applies to the questions displayed below] Arndt, Incorporated reported the following for 2024 and 2025 ( $ in millions): a. Expenses each year include $30 milion from a two-year casualty insurance policy purchased in 2024 for $60 million. The cost is tox deductible in 2024. b. Expenses include $2 miliion insurance premiums each year for life insurance on key executives. c. Arndt selis one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2024 and 2025 were $33 milion and $35 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $25 million (\$10 milion collected in 2023 but not recognized as revenue until 2024) and $33 million, respectively. (Hint: View this as two temporary differences-one reversing in 2024; one originating in 2024.) d. 2024 expenses included a $14 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold and the loss realized in 2025 . e. During 2023, accounting income included an estimated loss of $6 million from having accrued a loss contingency. The loss was paid in 2024 , at which time it is tax deductible. f. At January 1, 2024, Arndt had a deferred tax asset of $4 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 2024

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M. Datar, George Foster

11th Edition

013099619X, 978-0130996190

More Books

Students also viewed these Accounting questions