The information that follows pertains to Richards Refrigeration, Inc.:

1. At December 31, 2021, temporary differences existed between the financial statement book values and the tax bases of the following:
2. No temporary differences existed at the beginning of 2021.
3. Pretax accounting income was $218 million and taxable income was $145 million for the year ended December 31, 2021. The tax rate is 25%.

Required:

1. Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2021.

2. What is the 2021 net income?

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X Tax Rate % = Tax $ Recorded as: ($ in millions) $ 218.00 Pretax accounting income Permanent differences 218.00 25.00% X = $ 54.50 Income subject to taxation Temporary Differences $ = = 12.00 17.00 Prepaid insurance $ (48.00) x (68.00) x 43.00 X 145.00 25.00% 25.00% 25.00% 25.00% = $ 10.75 36.25 Income taxable in current year $ X 11 $ (s in millions) Future Taxable Tax (Deductible) Basis Amount $108 $ 48 0 68 0 (43) Book Value $156 68 43 Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency