Sorpon Corporation purchased equipment very late in 2014. Based on generous capital cost allowance rates provided in the Income Tax Act, Sorpon Corporation claimed CCA on its 2014 tax return but did not record any depreciation as the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amounts of $25,000 in 2015, $30,000 in 2016, and $40,000 in 2017. Sorpon's accounting income for 2014 is $200,000 and the tax rate is 30% for all years. There are no deferred tax accounts at the beginning of 2014.

Instructions

(a) Calculate the deferred tax balance at December 31, 2014.

(b) Calculate taxable income and income tax payable for 2014.

(c) Prepare the journal entries to record income taxes for 2014.

(d) Prepare the income tax expense section of the income statement for 2014, beginning with the line "Income before income tax."