Millie Co$.$ completed its first year of operations on December $31,201,$ with pre$-$tax financial income of $$400,000.$ Millie accrued a

contingent liability of $$900,000$ for financial reporting purposes; however, no tax deduction is permitted until a payment is made. Millie

also has gross profit of $$800,000$ from certain sales recognized currently for financial reporting purposes but that will be taxable as

installment sales in $202$ and $203$ when the cash is received $$400,000$ each year$).$ Millie's pre$-$tax financial income includes

$$38,000$ interest earned on its holdings of the bonds of the State of Montana. The tax rate is $21\%$ for all years.

Required:

Determine Millie's taxable income and taxes due for $201.$

Determine the changes in Millie's deferred tax amounts for $20$X$1.$

Calculate tax expense for Millie for $201.$