You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide Input on the company's Income tax position based on the followlng: 1 Pretax accounting Income was $70 million and taxable Income was $4 million for the year ended December 31, 2018. 2. The dlfference was due to three Items: a. Tax depreclation exceeds book depreclation by $60 million In 2018 for the business complex acquired that year. This amount ls scheduled to be $80 mlon In 2019 and to reverse as ($80 million) and ($60 million) In 2020, and 2021, respectively. b. Insurance of $14 milllon was pald In 2018 for 2019 coverage. c. A $8 million loss contingency was accrued In 2018, to be pald In 2020. 3. No temporary differences exlsted at the beginning of 2018. The tax rate is 40%. Required: 1. Determine the amounts necessary to record Income taxes for 2018 and prepare the approprlate Journal entry. 2 Assume the enacted federal income tax law specifies that the tax rate will change from 40% to 35% in 2020, when scheduling the reversal of the depreclation difference, you were uncertaln as to how to deal with the fact that the difference will continue to orlglnate In 2019 before reversing the next two years. Upon consulting PricewaterhouseCoopers' Comperio database, you found: 441 Depreclable and amortizable assets Only the reversals of the temporary difference at the balance sheet date would be scheduled. Future orlginations are not considered In determining the reversal pattern of temporary differences for depreciable assets. FAS 109 [FASB ASC 740-Income Taxes Is slent as to how the balance sheet date temporary diferences are deemed to reverse, but the FIFO pattern is Intended You Interpret that to mean that, when future taxable amounts are being scheduled, and a portion of a temporary difference has yet to orlglnate, only the reversals of the temporary difference at the balance sheet date can be scheduled and multiplied by the tax rate that will be In effect when the difference reverses. Future orlginations (Ike the depreclation difference the second year) are not consldered when determining the timing of the reversal. For the exlsting temporary difference, It Is assumed that the difference will reverse the first year the difference begins reversing. Determine the amounts necessary to record Income taxes for 2018 and prepare the approprlate Journal entry