Prepare the journal entry to record income taxes

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Southern Atlantic Distributors began operations in January 2013 and purchased a delivery truck for $100,000. 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 $580,000, which includes interest revenue of $80,000 from municipal bonds. The enacted tax rate is 45%

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.

2. What is Southern Atlantic’s 2013 net income?

Reference no: EM131295191

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