Bandung Corporation began 2014 with a $90,000 balance in the Deferred Tax Liability account. At the end of 2014, the related cumulative temporary difference amounts to $368,400, and it will reverse evenly over the next 2 years. Pretax accounting income for 2014 is $540,400, the tax rate for all years is 40%, and taxable income for 2014 is $397,000.
a. Compute income taxes payable for 2014.
b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
c. Prepare the income tax expense section of the income statement for 2014. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)