During 2014, Cumpuincs first year of operations, the company reports pretax financial income at $231,000. Cumpuincs enacted

During 2014, Cumpuinc’s first year of operations, the company reports pretax financial income at $231,000. Cumpuinc’s enacted tax rate is 40% for 2014 and 2015 and 30% for all later years. Cumpuinc expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2014, are summarized below.

Instructions
(a) Complete the schedule below to compute deferred taxes at December 31, 2014.

(b) Compute taxable income for 2014.
(c) Prepare the journal entry to record income tax payable, deferred taxes, and income tax expense for2014.

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Future Years 2015 2016 2017 2018 2019 Total 2010 2017 Future taxable (deductible) amounts Warranty costs Depreciation Installment sales $(20,000) $(60,000) $(25,000) $(105,000) (20,000) 12,000 2,000 $12,000 $12,000 28,000 135,000 60,000 75,000 December 31, 2014 Deferred Tax Future Taxable Amounts $(105,000) 135,000 (Deductible) Tax Temporary Difference e (Asset) Liability Warranty costs Depreciation Installment sales 28,000 Totals