South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $55,000 in 2015, $60,000 in 2016, and $65,000 in 2017. South Carolina's pretax financial income for 2014 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2014.Instructions(a) Compute taxable income and income taxes payable for 2014.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.(c) Prepare the income tax expense section of the income statement for 2014, beginning with the line ?Income before income taxes.?

[tex]Particulars \ \ \ \ \ \ \ \ \ 2017 \ \ \ \ \ \ \ \ \ 2016 \ \ \ \ \ \ \ \ \ 2015 \ \ \ \ \ \ \ \ \ 2014\\\\\text{Pre- tax financial income} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 300,000\\\\\text{Future taxable amounts}\\\\2014 =-(65 000+60 000+55,000) \ \ \ \ \ 65,000 \ \ \ \ \ \ 60,000 \ \ \ \ \ \ \ 55,000 \ \ \ \ \ -180,000\\\\\text{Taxable income for 2014} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 120,000[/tex][tex]\text{Income tax payable} \\\\ (120,000 \times 30 \%) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\\[/tex]

For point b:

Following are the journal:

[tex]Date \ \ \ \ \ \ \text{Account Titles and Explanation} \ \ \ \ \ \ \ \ \ \ \ Dr \ \ \ \ \ \ \ \ \ \ \ Cr\\\\[/tex]

[tex]\text{Income tax expense} \ (36,000 + 90,000)\ \ \ \ \ \ 90,000 \\\\[/tex]

[tex]\text{Income tax payable} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\[/tex]

Deferred tax liability [tex]\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 54,000\\\\[/tex]

[tex]\text{(To record the income tax expense)}\\\\[/tex]

Calculating the deferred tax liability:

[tex]Particulars \ \ \ \ \ \ \ \ \ \ \ \ 2017 \ \ \ \ \ \ \ \ \ \ \ 2016 \ \ \ \ \ \ \ \ \ \ \ 2015 \ \ \ \ \ \ \ \ \ \ \ \ Total\\\\\text{Future taxable anlounts} \ \ \ \ \ \ \ 65,00 \ \ \ \ \ \ \ 60,000 \ \ \ \ \ \ \ 55,000 \ \ \ \ \ \ \ 180,000\\\\\text{Tax rate} \ \ \ \ \ \ \ \ \ 30\% \ \ \ \ \ \ \ \ \ \ 30\% \ \ \ \ \ \ \ \ \ \ 30\% \\\\[/tex]

Deferred tax liability [tex]\ \ \ \ \ \ \ \ \ 192500 \ \ \ \ \ \ \ \ \ \ 18,000 \ \ \ \ \ \ \ \ \ 16,500 \ \ \ \ \ \ \ \ \ \ 54,000[/tex]

For point c:

Following are the preparation of the income tax section for the income statement session 2014:

[tex]\text{Income before income taxes} \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 300,000\\\\ \text{Income tax expense} \\\\[/tex]

[tex]Current \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 36,000\\\\[/tex]

Defensed [tex]\ 54,000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 90,000\\\\[/tex]

[tex]Net\ \ income \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 210,000[/tex]