Brian McDowell Co$.$ establishes a $$140$ million liability at the end of $2025$ for the estimated site$-$cleanup costs at two of its manufacturing facilities. All related closing costs will be paid and deducted on the tax return in $2026.$ Also, at the end of $2025,$ the company has $$70$ million of temporary differences due to excess depreciation for tax purposes, $$9\mathrm{.}80$ million of which will reverse in $2026.$

The enacted tax rate for all years is $20\%,$ and the company pays taxes of $$44\mathrm{.}80$ million on $$224\mathrm{.}00$ million of taxable income in $2025$ McDowell expects to have taxable income in $2026.$

$($a$).$

$($b$)$

Your answer is partially correct.

Indicate how the deferred taxes computed above will be reported on the balance sheet at the end of $2025.$

BRIAN MCDOWELL CO$.$ Balahse Sheet $($Partial$)$

December $31,2025$

Intangible Assets

Deferred Tax Asset

$

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