Blossom Co. at the end of 2024, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense Installment sales Taxable income Income tax expense for 2024 is $1500000 $300000. O $1020000. O $440000. O $580000. 3500000 The estimated litigation expense of $3500000 will be deductible in 2026 when it is expected to be paid. Gross profit of $1400000 from the installment sales will be realized in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1400000 current and $1400000 noncurrent. The income tax rate is 20% for all years. (2800000) $2200000

Blossom Co at the end of 2024, its first year ot operations, prepared a reconciliation between pretax financial incorre and taxible income as follows: The estimated litigation expense of $3500000 will be deductible in 2026 when it is expected to be pald, Gross proft of 51400000 from the instaliment sales will be realized in each of the ner two years. The estimated liability for litigation is classified as noncurrent and the instaliment accounts recelvable are classified as $1400000 current and $1400000 noncurrent. The income tax rate is 20 , for all years. Income tax expense for 2024 is $300000$1020000$440000$580000