Sherrod, Inc., reported pretax accounting Income of $92 million for 2021. The following information relates to differences between pretax accounting income and taxable income a. Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $6 million. The installment receivable account at year-end 2021 had a balance of $8 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023 b. Sherrod was assessed a penalty of $3 million by the Environmental Protection Agency for violation of a federal law in 2021. The fine is to be paid in equal amounts in 2021 and 2022 Sherrod rents its operating facilities but owns one asset acquired in 2020 at a cost of $104 million Depreciation is reported by the straight line method, assuming a four-year ugerul life. On the tax return, deductions for depreciation will be more than straight line depreciation the first two years but less than straight line depreciation the next two years ($ in millions) Tax Return Difference 5 (6) 2020 2021 2032 2023 Income Statement 5. 26 26 26 26 $100 $ 34 45 16 9 5104 (19) 10 $ 0 d. For tax purposes, warranty expense is deducted when costs are incurred. The balance of the warranty liability was Similion at the end of 2020. Warranty expense of $3 million is recognized in the income statement in 2021 $2 million of cost is incurred in 2021 and another 53 million of cost anticipated in 2022. At December 31, 2021, the warranty liability is $2 million (after adjusting entries) e. In 2021. Sherrod accrued an expense and related liability for estimated paid future absences of $13 million relating to the company's new paid vacation program. Future compensation will be deductible on the tax retum when actually paid during the next two years and another $3 million of cost anticipated in 2022. At December 1, 202, the warranty e. In 2021. Sherrod accrued an expense and related liability for estimated paid future absences of $13 million relating to the company's new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next two years ($7 million in 2022: $6 million in 2023). 1. During 2020, accounting income included an estimated loss of $6 million from having accrued a loss contingency. The loss is paid in 2021, at which time it is tax deductible Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2021 were $175 million and $2.50 million respectively. The enacted tax rate is 25% each year. Required: 1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry 2. What is the 2021 net income? 3. Show how any deferred tax amounts should be classified and reported in the 2021 balance sheet Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Show how any deferred tax amounts should be classified and reported in the 2021 balance sheet (Enter your answer in millions rounded to 2 decimal place ... 5.500,000 should be entered a 3.50) Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate Journal entry. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in millions rounded to 2 decimal places (1.8., 5,500,000 should be entered as 5.50).) Credit NO Front General Journal Debit 23,75 % 200 X 1 1 Income tax expense Deferred tax asset Deferred tax liability Income tax payable SIS 6.25 19.50 Required 2 > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Show how any deferred tax amounts should be classified and reported in the 2021 balance sheet (Enter your answer in millons rounded to 2 decimal places (le, 5,500,000 should be entered as 5,50) Deferred tax amounts (5 in millions) Classification Net noncurrent deferred tax liability 5.25 Amount