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fine is to be paid in equal amounts in 2024 and 2025 . c. Sherrod rents its operating facilities but owns one asset acquired in

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fine is to be paid in equal amounts in 2024 and 2025 . c. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $116 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ( $ in millions): d. For tax purposes, warranty expense is deducted when costs are paid. The bolance of the warranty liability was $1 million at the end of 2023 . Warranty expense of $5 million is recognized in the income statement in 2024.$3 million of cost is paid in 2024 . and another $3 million of costs are anticipated to be paid in 2025. At December 31,2024 , the warranty liability is $3 million (after adjusting entries). e. In 2024 . Sherrod accrued an expense and related liability for estimated paid future absences of $15 mallion relating to the company's new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next two years ( $10 million in 2025; $5 million in 2026). f. During 2023 , accounting income included an estimated loss of $6 million from having accrued a loss contingency. The loss is paid in 2024, at which time it is tax deductible. alances in the deferred tax asset and deferred tax liability accounts at January 1,2024 , were $1.75 miltion and $2.50 million. ospectively. The enacted tax rate is 25% each year. 1. Determine the amounts necessary to record income taxes for 2024 , and prepare the appropriate journal entry 2. What is the 2024 net income? 3. Show how any deferred tax amounts should be classified and reported in the 2024 balance sheet

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