Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2024 2025 Revenues $...
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Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2024 2025 Revenues $ 918 $ 1,010 Expenses 774 830 Pretax accounting income $144 $ 180 (income statement) Taxable income (tax return) $ 126 $ 214 Tax rate: 25% a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 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 $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million, respectively. Hint: View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $20 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 $10 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, Amdt had a deferred tax asset of $6 million and no deferred tax liability. 6. Suppose that during 2025, tax legislation was passed that will lower Arndt's effective tax rate to 15% beginning in 2026. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2025. Complete this question by entering your answers in the tabs below. Required Required 1 2 Suppose that during 2025, tax legislation was passed that will lower Arndt's effective tax rate to 15% beginning in 2026. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Note: Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Show less A Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): 2024 2025 Revenues $ 918 $ 1,010 Expenses 774 830 Pretax accounting income $144 $ 180 (income statement) Taxable income (tax return) $ 126 $ 214 Tax rate: 25% a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 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 $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million, respectively. Hint: View this as two temporary differences-one reversing in 2024; one originating in 2024. d. 2024 expenses included a $20 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 $10 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, Amdt had a deferred tax asset of $6 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 journal entry to record income taxes for 2025. Complete this question by entering your answers in the tabs below. Required Required 1 2 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 millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Show less A
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Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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