Problem $16-6($Algo$)$ Multiple differences; temporary difference yet to originate; tax rates change $[$LO$162,16-3,16-6$

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:

Pretax accounting income was $$74$ million and taxable income was $$14$ million for the year ended December $31,2024.$

The difference was due to three items:

a$.$ Tax depreciation exceeds book depreciation by $$60$ million in $2024$ for the business complex acquired that year. This amount is scheduled to be $$70$ million in $2025$ and to reverse as $($$$70$ million$)$ and $($$$60$ million$)$ in $2026$ and $2027,$ respectively.

b$.$ Insurance of $$8$ million was paid in $2024$ for $2025$ coverage.

c$.$ A $$8$ million loss contingency was accrued in $2024,$ to be paid in $2026.$

No temporary differences existed at the beginning of $2024.$

The tax rate is $25\%.$

Required:

Determine the amounts necessary to record income taxes for $2024,$ and prepare the appropriate journal entry.

Assume the enacted federal income tax law specifies that the tax rate will change from $25\%$ to $20\%$ in $2026.$ When scheduling the reversal of the depreciation difference, you were uncertain as to how to deal with the fact that the difference will continue to originate in $2025$ before reversing the next two years. Upon consulting PricewaterhouseCoopers' Comperio database, you found: