Sherrod, Incorporated, reported pretax accounting income of $$64$ million for $2024.$ 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 $2024$ exceeded that reported for

tax purposes by $$2$ million. The installment receivable account at year$-$end $2024$ had a balance of $$4$ million

$($representing portions of $2023$ and $2024$ installment sales$),$ expected to be collected equally in $2025$ and $2026.$

b$.$ Sherrod was assessed a penalty of $$1$ million by the Environmental Protection Agency for violation of a federal law in

The fine is to be paid in equal amounts in $2024$ and $2025.$

c$.$ Sherrod rents its operating facilities but owns one asset acquired in $2023$ at a cost of $$48$ million. 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$)$:

d$.$ For tax purposes, warranty expense is deducted when costs are paid. The balance of the warranty liability was $$1$

million at the end of $2023.$ Warranty expense of $$3$ million is recognized in the income statement in $2024.$ $$2$ million

of cost is paid in $2024,$ and another $$2$ million of costs are anticipated to be paid in $2025.$ At December $31,2024,$ the

warranty liability is $$2$ million $($after adjusting entries$).$

e$.$ In $2024,$ Sherrod accrued an expense and related liability for estimated paid future absences of $$11$ 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 $($ $$8$ million in $2025$; $$3$ million in $2026).$

f$.$ During $2023,$ accounting income included an estimated loss of $$4$ million from having accrued a loss contingency. The

loss is paid in $2024,$ at which time it is tax deductible.