Problem
South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $55,000 in 2015, $60,000 in 2016, and $65,000 in 2017. South Carolina's pre-tax Financial income for 2014 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2014.
a. Compute taxable income and income taxes payable for 2014.
b. Prepare the journal entry to record income tax expense, Beford income taxes, and income taxes payable for 2014. There are three entries.