Business, 24.03.2020 05:32 pison3163

Southern Atlantic Distributors began operations in January 2016 and purchased a delivery truck for $40,000. 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 2016, 30% in 2017, and 20% in 2018. Pretax accounting income for 2016 was $300,000, which includes interest revenue of $40,000 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 2018.
Tax Rate = Tax $ Recorded as:
Pretax accounting income * =
Permanent difference * =
Income subject to taxation * =
Temporary difference * =
income taxable in current year * =
2. What is Southern Atlantic's 2016 net income?

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Southern Atlantic Distributors began operations in January 2016 and purchased a delivery truck for $...

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