Required Information Problem 16-8 Multiple differences; taxable income given; two years; balance sheet classification; change in tax rate (L016-4, 16-6, 16-8] [The following Information applies to the questions displayed below.] Arndt, Inc., reported the following for 2018 and 2019 ($ in millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 40% 2018 2019 $ 913 $988 770810 $ 143 $ 178 $ 135 $ 200 a. Expenses each year Include $30 million from a two-year casualty Insurance policy purchased in 2018 for $60 million. The cost is tax deductible in 2018. b. Expenses Include $2 million Insurance premlums each year for life Insurance on key executives. c. Arndt sells one-year subscriptions to a weekly Journal. Subscription sales collected and taxable in 2018 and 2019 were $34 million and $31 million, respectively. Subscriptions Included in 2018 and 2019 financial reporting revenues were $21 million ($10 million collected in 2017 but not recognized as revenue until 2018) and $29 million, respectively. Hint: View this as two temporary differences-one reversing in 2018; one originating in 2018. d. 2018 expenses Included a $12 million unrealized loss from reducing Investments (classified as trading securities) to falr value. The Investments were sold in 2019. e. During 2017, accounting Income Included an estimated loss of $5 million from having accrued a loss contingency. The loss was paid in 2018 at which time it is tax deductible. f. At January 1, 2018, Arndt had a deferred tax asset of $5 million and no deferred tax liability. 6. Suppose that during 2019, tax legislation was passed that will lower Arndt's effective tax rate to 32% beginning in 2020. Prepare a schedule that reconciles the difference between pretax accounting Income and taxable income. Using the schedule, prepare the necessary Journal entry to record Income taxes for 2019. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose that during 2019, tax legislation was passed that will lower Arndt's effective tax rate to 32% beginning in 2020. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) ($ in millions) Current Year 2019 Future Taxable Amounts [2020] Future Deductible Amounts [2020] Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance (reversing) Subscriptions2018 Subscriptions-2019 Unrealized loss (reversing) Taxable income income tax return) sing) Enacted tax rate Tax payable currently Deferred tax liability Deferred tax asset Deferred tax liability Deferred tax asset Ending balances (balances currently needed) Less: Beginning balances Changes needed to achieve desired balances $ 0 $ 0 Required 1 Required 2 prepare the necessary journal entry to record income taxes for 2019. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record 2019 income taxes. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal