South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $57,580 in 2015, $63,610 in 2016, and $69,093 in 2017. South Carolinas pretax financial income for 2014 is $350,160, and the tax rate is 40% for all years. There are no deferred taxes at the beginning of 2014.

Compute taxable income and income taxes payable for 2014. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.

Prepare the income tax expense section of the income statement for 2014, beginning with the line Income before income taxes.