Sherrod, Incorporated, reported pretax accounting income of $$68$ million for $2024.$ The following information relates to differences between pretax accounting income and taxable income:

Income from installment sales of properties included in pretax accounting income in $2024$ exceeded that reported for tax purposes by $$6$ million. The installment receivable account at year$-$end $2024$ had a balance of $$8$ million $($representing portions of $2023$ and $2024$ installment sales$),$ expected to be collected equally in $2025$ and $2026.$

Sherrod was assessed a penalty of $$4$ million by the Environmental Protection Agency for violation of a federal law in $2024.$ The fine is to be paid in equal amounts in $2024$ and $2025.$

Sherrod rents its operating facilities but owns one asset acquired in $2023$ at a cost of $$56$ million. Depreciation is reported by the straight$-$line method, assuming a four$-$year useful life. On the tax return, deductions for depreciation will be more than straight$-$line depreciation the first two years but less than straight$-$line depreciation the next two years $($$ in millions$)$:

Income Statement Tax Return Difference

$2023$ $ $14$ $ $18$ $ $(4)$

$20241422(8)$

$20251486$

$20261486$

$ $56$ $ $56$ $ $0$

For tax purposes, warranty expense is deducted when costs are paid. The balance of the warranty liability was $$3$ million at the end of $2023.$ Warranty expense of $$5$ million is recognized in the income statement in $2024.$ $$4$ million of cost is paid in $2024,$ and another $$4$ million of costs are anticipated to be paid in $2025.$ At December $31,2024,$ the warranty liability is $$4$ million $($after adjusting entries$).$

In $2024,$ 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 $($$$8$ million in $2025$; $$6$ million in $2026).$

During $2023,$ accounting income included an estimated loss of $$2$ million from having accrued a loss contingency. The loss is paid in $2024,$ at which time it is tax deductible.

Balances in the deferred tax asset and deferred tax liability accounts at January $1,2024,$ were $$1\mathrm{.}25$ million and $$1\mathrm{.}50$ million, respectively. The enacted tax rate is $25\%$ each year.

Required:

Determine the amounts necessary to record income taxes for $2024,$ and prepare the appropriate journal entry.

What is the $2024$ net income?

Show how any deferred tax amounts should be classified and reported in the $2024$ balance sheet.