Business, 28.07.2021 15:30 phillswift2020

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 following: 1. Pretax accounting income was $45 million and taxable income was $8 million for the year ended December 31, 2021.
2. The difference was due to three items:

a. Tax depreciation exceeds book depreciation by $30 million in 2021 for the business complex acquired that year. This amount is scheduled to be $60 million in 2022 and to reverse as ($50 million) and ($40 million) in 2023 and 2024, respectively.
b. Insurance of $12 million was paid in 2021 for 2022 coverage.
c. A $5 million loss contingency was accrued in 2021, to be paid in 2023.

3. No temporary differences existed at the beginning of 2021.
4.The tax rate is 25%.

Required:
a. Determine the amounts necessary to record income taxes for 2021 and prepare the appropriate journal entry.
b. How should the deferred tax amounts be classified in a classified balance sheet?

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You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide...

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