t Sherrod, Inc., reported pretax accounting income of $100 million for 2018. The following information relates to differences between pretax accounting income and taxable income a. Income from installiment sales of properties included in pretax accounting income in 2018 exceeded that reported for b. Sherrod was assessed a penalty of $4 million by the Environmental Protection Agency for violation of a federal law in c. Sherrod rents its operating facilities but owns one asset acquired in 2017 at a cost of $120 million. Depreciation is tax purposes by $8 million. The installiment recelvable account at year-end had a balance of $10 million (representing portions of 2017 and 2018 installment sales), expected to be collected equally in 2019 and 2020. 2018. The fine is to be paid in equal amounts in 2018 and 2019 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 (S in millions). Income Statement Tax Return Difference e 2017 2018 2019 s 30 30 30 202030 $120 39 51 20 10 $120 s (9) (21) 10 20 d. War ranty expense of $7 million is reported in 2018. For tax purposes, the expense is deducted when costs are incurred, $4 million in 2018. At December 31, 2018, the warranty liability was $4 million (after balance was $1 million at the end of 2017 adjusting entries). The rrod accrued an expense and related liability for estimated paid future absences of $14 million relating to new paid vacation program. Future compensation will be deductible on the tax return when actually the paid during the next two years ($9 million in 2019, $5 million in 2020) During 2017, accounting income included an estimated loss of $4 million from having accrued a loss contingency. The loss is paid in 2018 at which time it is tax deductible. Balances in the deferred tax asset and deferred tax liability accounts at January 1.2018, were $2.0 million and $4.4 million, respectively. The enacted tax rate is 40% each year Required: 1. Determine the amounts necessary to record income taxes for 2018 and prepare the 2. What is the 2018 net income? 3. Show how any deferred tax amounts should be classified and reported in the 2018 balance sheet Complete this question by entering your answers in the tabs below. Required Required Required Show how any deferred tax amounts should be classified and reported in the 2018 balance sheet. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Deferred tax amounts ($ in millions) Classification Net noncurrent deferred tax Required 2