Accounting income and taxable income difference

Assignment Help Accounting Basics

Reference no: EM13157932

Southern Atlantic Distributors began operations in January 2011 and purchased a delivery truck for $48,000. 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 2011, 30% in 2012, and 20% in 2013. Pretax accounting income for 2011 was $274,000, which includes interest revenue of $37,000 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) Prepare the journal entry to record income taxes in 2011.

Reference no: EM13157932

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