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CI 8. Required information [The following information applies to the questions displayed below. Part 1 of 6 Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 10 points Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2021 $1,068 832 $ 236 $ 170 2022 $1,052 836 $ 216 $ 254 eBook Print References a. Expenses each year include $84 million from a two-year casualty insurance policy purchased in 2021 for $168 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 $69 million and $71 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $61 million ($46 million collected in 2020 but not recognized as revenue until 2021) and $69 million, respectively. Hint. View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $50 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 $42 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 $22 million and no deferred tax liability. 10 points 2. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2021. eBook Complete this question by entering your answers in the tabs below. Print References Required 1 Required 2 Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Part 2 of 6 ($ in millions) Current Year 2021 Future Taxable Amounts [2022] Future Deductible Amounts [2022] 10 points 2.0 $ 0 0 eBook Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance expense Subscriptions2020 Subscriptions2021 Unrealized loss Loss contingency Taxable income 0 0 Print 0 References 0 0 $ 2.0 0.0 25.0% 25.0% 25.0% Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset 0.0 0.0 Complete this question by entering your answers in the tabs below. Part 2 of 6 Required 1 Required 2 10 points 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).) eBook View transaction list View journal entry worksheet Print References No Transaction General Journal Debit Credit 1 1 No Transaction Recorded eBook 3. Compute the deferred tax amounts that should be reported on the 2021 balance sheet. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Print References Deferred tax amounts ($ in millions) Classification Amount Net noncurrent deferred tax asset 4. 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 2022. Part 4 of 6 Answer is not complete. 10 points Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 5.5).) g Required information Part 4 of 6 ($ in millions) Current Year 2022 Future Taxable Amounts [2023] Future Deductible Amounts [2023] 10 points Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions2021 Subscriptions2022 Unrealized loss (reversing) Taxable income income tax return) (54.0) (54.0) 0 0.0 Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset 11 4. 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 2022. Part 4 of 6 Answer is not complete. Complete this question by entering your answers in the tabs below. 10 points Required 1 Required 2 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 5.5).) No Transaction General Journal Debit Credit 5. Compute the deferred tax amounts that should be reported on the 2022 balance sheet. (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) Answer is not complete. Deferred tax amounts ($ in millions) Classification Amount Net noncurrent deferred tax asset 13 . 6. 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. Using the schedule, prepare the necessary journal entry to record income taxes for 2022. Part 6 of 6 Complete this question by entering your answers in the tabs below. 10 points Required 1 Required 2 Skipped 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 5.5).) eBook Pronara a crhornle that rornnrilec the differenro hatunan nratav arruintin inrame and tavahia incon 13 Required information Part 6 of 6 ($ in millions) Current Year Future Taxable Future Deductible 2022 Amounts [2023] Amounts [2023] 10 points Skipped Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions2021 Subscriptions2022 Unrealized loss (reversing) Taxable income (income tax return) eBook Print 0.0 References Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset 13 Required information 6 6 Part 6 of 6 Required 1 Required 2 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 5.5).) 10 points Part 6 of 6 Journal entry worksheet 10 points 1 Skipped Record 2022 income taxes. eBook Note: Enter debits before credits. Print References Transaction General Journal Debit Credit 1