Reference no: EM13917043

Corning-Howell reported taxable income in 2013 of $180 million. At December 31, 2013, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Carrying Amount Tax Basis Assets Current Allowance for uncollectable accounts $ 16 million $ 24 million Prepaid insurance 37 million 0 Prepaid advertising 9 million 0 Noncurrent Investments at fair value with changes in OCI* 4 million 0 Buildings and equipment (net) 440 million 340 million Liabilities Current Liability-subscriptions received 22 million 0 Long-term Liability-postretirement benefits 575 million 0 *Gains and losses taxable when investments are sold. The total deferred tax asset and deferred tax liability amounts at January 1, 2013, were $250 million and $55 million, respectively. The enacted tax rate is 40% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2013. (Enter your answers in millions. Input all amounts as positive values.) Deferred tax asset $ million Deferred tax liability $ million 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2013. (Enter your answers in millions. Input all amounts as positive values.) Deferred tax asset $ million Deferred tax liability $ million 3. Determine the income tax payable currently for the year ended December 31, 2013. (Enter your answer in millions.) Income tax payable $ million 4. Prepare the journal entry to record income taxes for 2013. (Enter your answers in millions.) General Journal Debit Credit 5. Show how the deferred tax amounts should be classified and reported in the 2013 balance sheet. (Enter your answers in millions. Round your answers to the nearest million amount. Input all amounts as positive values.) Current Liabilities: Deferred taxes $ Other assets: Deferred taxes $