South Carolina Corporation has one temporary difference at the end of 2014 that were reversed and cause taxable amounts of $55,000 and 2015, $60,000 in 2016, and $65,000 and 2017.
South Carolina's pre-tax Financial income for 2014 is $300,000, and the tax rate is 30% for all year. There are no deferred taxes at the beginning of 2014.
a. Taxable income is $120,000 and income taxes payable are $36,000.
b. Income tax expense 90000
income tax payable. 36000
deferred tax liability. $54,000
c. Prepare the income tax expense section of the income statement for 2014, beginning with the line income before income taxes