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At December 31, DePaul Corporation had a $16 million balance

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At December 31, DePaul Corporation had a $16 million balance in its deferred tax asset account and a $68 million balance it is deferred tax liability account. The balances were due to the following cumulative temporary differences:
1.Estimated warranty expense, $15 million: expense recorded in the year of the sale; tax-deductible when paid (one-year warranty).
2.Depreciation expense, $120 million: straight-line in the income statement: MARCS on the tax return.
3.Income from installment sales of properties, $50 million: income recorded in the year of the sale; taxable when received equally over the next five years.
4.Bad debt expense, $25 million: allowance method for accounting; direct write-off for tax purposes.


Show how any deferred tax amounts should be classified and reported in the December 31 balance sheet. The tax rate is 40%.



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