Mid-South Cellular Systems began operations in 2024. In 2025, its second year of operations, pretax accounting income was $88 million, which included the following amounts: 1. Insurance expense of $14 million, representing one-third of a $42 million, three-year casualty and liability insurance policy that is deducted for tax purposes entirely in 2025. 2. Insurance expense for a $2 million premium on a life insurance policy that guarantees a $50 million payment upon the death of the company president. The premium is not deductible for tax purposes. 3. An asset with a four-year useful life was acquired last year. It is depreciated by the straight-line method in the income statement. MACRS is used on the tax return, causing deductions for depreciation to be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ( $ in millions): 4. Equipment rental revenue of $80 million is reported in the income statement, which does not include an additional $20 million of advance payment for 2026 rent. Because tax law requires that advance rent be taxed when it is received, $100 million of rental revenue is correctly reported on the 2025 income tax return. The enacted tax rate is 25%. - Reconcile Pretax Financial Income to Taxable Income for 2025 - Compute Income Tax Payable at 12/31/2025 - Determine the balances in the DTA and DTL as well as the adjustments for 2025. - Record the tax entry for 2025 - Record the tax provision disclosure for 2025