On January $1,2025,$ equipment costing $$597,200$ is purchased. For financial reporting purposes, the company uses straightline depreciation over a $5-$year life. For tax purposes, the company uses the elective straight$-$line method over a $5-$year life. $($Hint: For tax purposes, the half$-$year convention as discussed in Appendix $10$A must be used.$)$

In January $2026,$$$222,300$ is collected in advance rental of a building for a $3-$year period. The entire $$222,300$ is reported as taxable income in $2026,$ but $$148,200$ of the $$222,300$ is reported as unearned revenue in $2026$ for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in $2027$ and $2028.$

The tax rate is $20\%$ in $2025$ and all subsequent periods. $($Hint: To find taxable income in $2025$ and $2026,$ the related income taxes payable amounts will have to be "grossed up$.")$

No temporary differences existed at the end of $2024.$ Blossom expects to report taxable income in each of the next $5$ years.

$($a$)$

Your answer is partially correct.

Determine the amount to report for deferred income taxes at the end of $2025,$ and indicate how it should be classified on the balance sheet.

Amount to report for deferred income taxes