Southern Atlantic Distributors began operations in January 2013 and purchased a delivery truck for $20,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes, the deduction is 45% of cost in 2013, 30% in 2014, and 25% in 2015. Pretax accounting income for 2013 was $220,000, which includes interest revenue of $36,000 from municipal bonds. The enacted tax rate is 25%. Assuming no differences between accounting income and taxable income other than those described above:
Required:
1.Prepare the journal entry to record income taxes in 2013.
2. What is Southern Atlantic's 2013 net income?