E$18\mathrm{.}9($LO $4)($Three Differences, Classify Deferred Taxes$)$ At December $31,2024,$ Belmont

Company had a net deferred tax liability of $$375,000.$ An explanation of the items that compose this

balance is as follows.

Temporary Differences

Resulting Balances

in Deferred Taxes

$1.$ Excess of tax depreciation over book depreciation. $2.$ Accrual, for book purposes, of estimated loss contingency from

pending lawsuit that is expected to be settled in $2025.$ The loss will be

deducted on the tax return when paid.

$3.$ Accrual method used for book purposes and installment method used

for tax purposes for an isolated installment sale of an investment. $$200,000$

$(50,000)$

$225,000$

$$375,000$

In analyzing the temporary differences, you find that $$30,000$ of the depreciation temporary difference

will reverse in $2025,$ and $$120,000$ of the temporary difference due to the installment sale will reverse in

$2025.$ The tax rate for all years is $20\%.$Exercises $18-53$

Instructions

Indicate the manner in which deferred taxes should be presented on Belmont Company$$s December $31,$