Mill Company began operations on January $1,20$X$1,$ and recognized income from construction$-$type contracts under different methods for tax purposes and financial reporting purposes. Information concerning income recognition under each method is as follows:

Year Tax Purposes Book Purposes

$20$X$1$ $ $400,000$ $ $0$

$20$X$2625,000375,000$

$20$X$3750,000850,000$

Required:

Assume the income tax rate is $21\%$ in all years and that Mill has no other temporary differences. In its December $31,20$X$3,$ balance sheet, what amount of deferred income taxes should Mill report? Indicate whether the amount is an asset or a liability