Open with Free Question 1 2 points Save Answer Mathis Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense $ 1,200,000 3,000,000 (2.400.000) $ 1.800.000 Installment sales Taxable income The estimated litigation expense of $3,000,000 will be deductiblo in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1,200,000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1,200,000 current and $1,200,000 noncurrent. The income tax rate is 20% for all years. The deferred tax asset to be recognized is $600,000 current $600,000 noncurrent $120,000 current $0