Southern Atlantic Distributors began operations in January 2013 and purchased a delivery truck for $80,000....
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Accounting
Southern Atlantic Distributors began operations in January 2013 and purchased a delivery truck for $80,000. 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 50% of cost in 2013, 30% in 2014, and 20% in 2015. Pretax accounting income for 2013 was $440,000, which includes interest revenue of $45,000 from municipal bonds. The enacted tax rate is 40%. Assuming no differences between accounting income and taxable income other than those described above:
Required:
1.
Complete the following table given below and prepare the journal entry to record income taxes in 2013. (If no entry is required for anevent, select "No journal entry required" in the first account field.)
2. Enter Journal Entry:
3. What is Southern Atlantics 2013 net income?
Tax Rate Tax $ Recorded as $ 440,000 Pretax accounting income Permanent difference Income subject to taxation Temporary Difference Income taxable in current year
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