Sherrod, Inc., reported protax accounting income of $100 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 $8 million. The installment receivable account at year end 2021 had a balance of $10 million representing portions of 2020 and Sherrod was assessed a penalty of 54 milion by the Environmental Protection Agency for violation of a federal tow 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 $120 milion Depreciation is reported by the straight-line method, assuming a four year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ($ in millions Income Statement Teturn Ofference 2020 530 $39 (9) 2021 $1 (21) 2022 30 20 10 2023 20 3120 5120 50 30 30 d. For tax purposes, warranty expense is deducted when costs are incurred The balance of the warranty liability was $1 milion at the end of 2020 Warranty expense of $7 million is recognized in the income statement in 2021 54 million of cost is incurred in 2021, and another $3 million of cost anticipated in 2022. Al December 31, 2021 the warranty ability is $4 million after adjusting entries e In 2021. Sherrod accrued an expense and related liability for estimated paid future absences of $14 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 ($9 million in 2022, $5 million in 2023) During 2020 accounting income included an estimated loss of S4 million from having actrued a los contingency The Sons is paid in 2021, at which time it is tax deductible Balances in the deferred tax asset and deferred tax nobility accounts of January 1, 2021 were $1.25 million and $2,75 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 3. Show how any deferred tax amounts should be classified and reported in the 2021 bintance sheet Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Determine the amounts necessary to record income taxes for 2021. and prepare the appropriate journal entry it ne entry is required for a transaction/event, select "No journal entry required in the first account held. Enter your answers in mens rounded to deal places le 5.500.000 should be entered as 5.50) qui diswers 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 (lle, 5,500,000 should be entered as 5.50).) View transaction list Journal entry worksheet 1 Record 2021 income taxes. Note: Enter debits before credits. Debit Credit Event 1 General Journal Income tax expense Deferred tax asset Deferred tax liability income tax payable View general journal Clear entry Record entry 021. at which time it is tax deductible having accrued a loss contingency. The loss is Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2021, were $1.25 million and $275 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 a 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 places (i.e., 5,500,000 should be entered as 5.50).) Deferred tax amounts (sin millions) Classification Amount Net noncurrent deferred tax liability