Required information Problem 16-8 Multiple differences; taxable income given; two years; balance sheet classification; change in tax rate (LO16-4, 16-6, 16-8] The following information applies to the questions displayed below.j 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 $ 904 768 $ 136 $ 130 2019 $ 982 808 $ 174 $ 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 $1 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 2018 and 2019 were $28 million and $41 million, respectively. Subscriptions included in 2018 and 2019 financial reporting revenues were $20 million ($9 million collected in 2017 but not recognized as revenue until 2018) and $28 million, respectively. Hint: View this as two temporary differences-one reversing in 2018; one originating in 2018. d. 2018 expenses included a $18 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold in 2019. e. During 2017, accounting income included an estimated loss of $3 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 $5 million and no deferred tax liability. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. (Amounts t deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered a ($ in millions) Current Year 2018 Future Taxable Amounts (2019) Future Deductible Amounts [2019] $ 174 Pretax accounting income Permanent difference: Life insurance premiums Temporary differences: Casualty insurance expense Subscriptions2017 Subscriptions2018 Unrealized loss Loss contingency Taxable income $ 175 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 S Required 1 Required 2 > prepare the necessary journal entry to record income taxes for 2018. (If no entry is required for a transact entry required" in the first account field.) View transaction list Journal entry worksheet Record 2018 income taxes. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal PIUNILI TUTUL 3. Compute the deferred tax amounts that should be reported on the 2018 balance sheet. (Enter your answers in millions (ie 10,000,000 should be entered as 10).) Deferred tax amounts (S in millions) Classification Amount