Required information Problem 16-8 (Algo) Multiple differences; taxable income given; two years; change in tax rate; financial statement effects [LO16-1, 16-2, 16-3, 16-5, 16-6, 16-8] [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 $74 million from a two-year casualty insurance policy purchased in 2024 for $148 million. The cost is tax deductible in 2024. 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 2024 and 2025 were $75 million and $91 million, respectively. Subscriptions included in 2024 and 2025 financlal reporting revenues were $69 million ( $52 million collected in 2023 but not recognized as revenue unti 2024) and $75 million, respectively. Hint View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $58 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 $48 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 $25 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, prepare the necessary joumal entry to record income taxes for 2025. Complete this question by entering your answers in the tabs below. Suppose that during 2025, tax legisiation 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 (1.e., 5,500,000 should be entered as 5.5). 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. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in militions rounded to 1 decimal place (1.e., 5,500,000 should be entered as 5.5 ). Prepare the necessary journal entry to record income taxes for 2025. Note: 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 (1.e., 5,500,000 should be entered as 5.5). Journal entry worksheet Note: Enter debits before eredits
