Rose Inc. reported a pretax accounting income of $84 million for 2021. The following information relates to the differences between pretax accounting income and taxable income.

A) income from installment sales of properties included in pretax accounting income in 2021excludedthat reported for tax purpose by $3 million. The installment receivable account at year-end 2021 had a balance of $4 million (representingaportionof2020 and 2021 installment sales), expected tobe collectedequally in 2022 and 2023

B) Rosewas assesseda penalty of $4 million by the environmental protection agency for violating a Federal law in 2021. The fine is tobe paidin equal amounts in 2021 and 2022

C) Rose rents its operating facility but owns one assetacquiredin 2020 at the cost of $88 million. Depreciationis reportedby the straight-line method, assuming a four-year useful life. On the tax return, a deduction for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ($ in millions)

Income statement Tax Return Difference

2020 $22 $29 $(7)

2021 $22 $36 $(14)

2022 $22 $13 $9

2023 $22 $10 $12

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$88 $88 $0

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D) For tax purposes, warranty expenseis deductedwhen costsare incurred. The balance of the warrant liability was $1 million at the end of 2020. Warranty expense of $3 millionis recognizedin the income statement in 2021. $2millionof costis incurredin 2021, and another $ 3millionof cost isanticipatedin 2022.OnDecember 31, 2021, the warranty liability is $2 million (after adjusting entry)

E) In 2021, Rose Inc.accruedan expense and related liabilities for an estimated paid future absence of $8 million related to its new paid vacationprogram. Futurecompensation will be deductible on the tax return when actually paid during the next two years ($5million 2022, 3million in 2023)

F) During 2020, accounting income included an estimated loss of $4million from havingaccrueda loss contingency. The loss paidis paidin 2021, at which time it is tac deductible.

Balances in the deferred tax asset and deferred tax liability accounts on January 1, 2021, were $1.3 million and $2 million, respectively. The enacted tax rate is 25% each year.

Please work on the following problems.

1) Determine the amounts necessary to record income tax for 2021 and make theappropriate journalentry

2) what is the 2021 net income

3) Show how any deferred tax amount shouldbe classifiedand reported in the 2021 balance sheet.

Enter the answer to the question in the table below

1 2 3

Calculate the amount necessary to record income tax for 2021 and make theappropriate journalentry. (if no entryis neededfor a transaction/event, select "no journal entry needed" in the first account field. Enter your answers in millions rounded to 2 decimal places (I.e.,5,5000,000 should be 5.50).)

Journal entry worksheet

1

1 Record 2021 Income Taxes

EVENT General Journal Debit Credit

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Answer the question below by entering the table below

1 2 3

What is the 2021 net income (enter your answers in millions rounded to 2 decimal places, I.e., $5,500,0000 as 5.50.)

2

Net income for 2021__________________millions

Answer the questions below by entering in the table

1 2 3

Show how any deferred tax amounts shouldbe classifiedand reported in the 2021 balance sheet. (enter your answer in millions rounded to 2 decimal places (I.e.,5,500, 000 shouldbe enteredas 5.50).)

3

Deferred TaxAmount($ in millions)

classification Amount

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