Corning-Howell reported taxable income in 2021 of $124 million. At December 31, 2021, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below:

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Carrying Amount Tax Basis Assets Current Net accounts receivable $ 12 million $ 16 million Prepaid insurance Prepaid advertising Noncurrent 24 million 8 million Investments in equity securities (fair value)* Buildings and equipment (net) Liabilities 8 million 364 million 284 million Current Deferred subscription revenue Long-term Liability-compensated future absences 16 million 598 million Gains and losses taxable when investments are sold. The total deferred tax asset and deferred tax liability amounts at January 1, 2021, were $158.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2021. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2021. 3. Determine the income tax payable currently for the year ended December 31, 2021. 4. Prepare the journal entry to record income taxes for 2021. Carrying Amount Tax Basis Assets Current Net accounts receivable $ 12 million $ 16 million Prepaid insurance Prepaid advertising Noncurrent 24 million 8 million Investments in equity securities (fair value)* Buildings and equipment (net) Liabilities 8 million 364 million 284 million Current Deferred subscription revenue Long-term Liability-compensated future absences 16 million 598 million Gains and losses taxable when investments are sold. The total deferred tax asset and deferred tax liability amounts at January 1, 2021, were $158.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2021. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2021. 3. Determine the income tax payable currently for the year ended December 31, 2021. 4. Prepare the journal entry to record income taxes for 2021.

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Part 1 Deferred Tax Asset Allowance for Doubtful Debts 161240 100 Def... View the full answer