Southern Atlantic Distributors began operations in January 2018 and purchased a delivery truck for $40,000. 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 2018, 30% in 2019, and 20% in 2020. Pretax accounting income for 2018 was $280,000, which includes interest revenue of $40,000 from municipal bonds. The enacted tax rate is 30%. Assuming no differences between accounting income and taxable income other than those described above: Required: 1. Complete the following table given below and prepare the journal entry to record income taxes in 2018. 2. What is Southern Atlantics 2018 net income?

Complete the following table given below to record income taxes in 2018. (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

			Tax Rate %		Tax $	Recorded as:
Pretax accounting income	$280
Permanent difference	40,000
Income subject to taxation	40,280	x	30%		$12,084	Deferred tax asset
Temporary difference		x		=		Deferred tax liability
Income taxable in current year	$40,280	x		=		Income tax payable

ournal entry worksheet

Record 2018 income taxes.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1