Current Attempt in Progress

Sandhill Inc.$\text{'}$s only temporary difference at the beginning and end of $2024$ is caused by a $\backslash (\backslash$$ $3\mathrm{.}63\backslash )$ million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable $($only one$-$half of which is classified as a current asset$)$ is due in equal installments in $2025$ and $2026.$ The related deferred tax liability at the beginning of the year is $\backslash (\backslash$$ $1,089,000\backslash ).$ In the third quarter of $2024,$ a new tax rate of $\backslash (20\backslash \%\backslash )$ is enacted into law and is scheduled to become effective for $2026.$ Taxable income for $2024$ is $\backslash (\backslash$$ $6,050,000\backslash ),$ and taxable income is expected in all future years.

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Determine the amount reported as a deferred tax liability at the end of $2024.$

Deferred tax liability $\backslash$$

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Prepare the journal entry necessary to adjust the deferred tax liability when the new tax rate is enacted into law. $($List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

Deferred Tax Liability

Income Tax Expense

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List of Accounts Draft the income tax expense portion of the income statement for $2024.$ Begin with the line "Income before income taxes." Assume no permanent differences exist. $($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).)$SANDHTLL INC.$\text{'}$s Income Statement $($Partial$)$