Required information The following information applies to the questions displayed below.] Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2022 2021 $888 $980 Revenues 760 800 Expenses Pretax accounting income (income statement) Taxable income (tax return) $ 128 $ 116 $ 180 $200 Tax rate: 25% Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 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 w $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint. View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $14 million unrealized loss from reducing investments (classified as trading securities) to fair ere value. The investments were sold and the loss realized in 2022. e. During 2020, accounting income included an estimated loss of $6 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 $4 million and no deferred tax liability Required: 1. Which of the five differences described in items a-e are temporary and which are permanent differences? a. Casualty insurance expense b. Life insurance premiums C. Subscriptions d. Unrealized loss on trading securities Loss contingency . Required 1 Required 2 Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Future Deductible Amounts [2022] Current Year 2021 Future Taxable ($ in millions) Amounts [2022] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance expense Subscriptions-2020 Subscriptions-2021 Unrealized loss Loss contingency Taxable income Enacted tax rate (% Tax payable currently Deferred tax liability Deferred tax asset Required 1 Required 2 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).) Deferred tax amounts ($ in millions) Classification Amount 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 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 millions (i.e., 10,000,000 should be entered as 10).) Current Year 2022 Future Taxable Amounts [2023] Future Deductible ($ in millions) Amounts [2023] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions-2021 Subscriptions-2022 Unrealized loss (reversing) Taxable income (income tax return) Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset Required 1 Required 2 Journal entry worksheet 1 Record 2022 income taxes Note: Enter debits before credits General Journal Credit Transaction Debit 1 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).) Deferred tax amounts ($ in millions) Classification Amount 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 (i.e., 10,000,000 should be entered as 10).) Current Year Future Taxable Future Deductible ($ in millions) Amounts [2023] 2022 Amounts [2023] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions-2021 022 Unrealized loss (reversing) Taxable income (income tax return) Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset 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 Complete this question by entering your answers in the tabs below. Required 2 Required 1 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).) View transaction list Journal entry worksheet 1 Record 2022 income taxes. Note: Enter debits before credits. Transaction General Journal Debit Credit Required information The following information applies to the questions displayed below.] Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2022 2021 $888 $980 Revenues 760 800 Expenses Pretax accounting income (income statement) Taxable income (tax return) $ 128 $ 116 $ 180 $200 Tax rate: 25% Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 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 w $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint. View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $14 million unrealized loss from reducing investments (classified as trading securities) to fair ere value. The investments were sold and the loss realized in 2022. e. During 2020, accounting income included an estimated loss of $6 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 $4 million and no deferred tax liability Required: 1. Which of the five differences described in items a-e are temporary and which are permanent differences? a. Casualty insurance expense b. Life insurance premiums C. Subscriptions d. Unrealized loss on trading securities Loss contingency . Required 1 Required 2 Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Future Deductible Amounts [2022] Current Year 2021 Future Taxable ($ in millions) Amounts [2022] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance expense Subscriptions-2020 Subscriptions-2021 Unrealized loss Loss contingency Taxable income Enacted tax rate (% Tax payable currently Deferred tax liability Deferred tax asset Required 1 Required 2 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).) Deferred tax amounts ($ in millions) Classification Amount 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 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 millions (i.e., 10,000,000 should be entered as 10).) Current Year 2022 Future Taxable Amounts [2023] Future Deductible ($ in millions) Amounts [2023] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions-2021 Subscriptions-2022 Unrealized loss (reversing) Taxable income (income tax return) Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset Required 1 Required 2 Journal entry worksheet 1 Record 2022 income taxes Note: Enter debits before credits General Journal Credit Transaction Debit 1 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).) Deferred tax amounts ($ in millions) Classification Amount 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 (i.e., 10,000,000 should be entered as 10).) Current Year Future Taxable Future Deductible ($ in millions) Amounts [2023] 2022 Amounts [2023] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions-2021 022 Unrealized loss (reversing) Taxable income (income tax return) Enacted tax rate (%) Tax payable currently Deferred tax liability Deferred tax asset 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 Complete this question by entering your answers in the tabs below. Required 2 Required 1 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).) View transaction list Journal entry worksheet 1 Record 2022 income taxes. Note: Enter debits before credits. Transaction General Journal Debit Credit