Southern Atlantic Distributors began operations in January 2021 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 2021, 30% in 2022, and 20% in 2023. Pretax accounting income for 2021 was $300,000, which includes interest revenue of $40,000 from municipal governmental bonds. The enacted tax rate is 25%. 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 2021. 2. What is Southern Atlantics 2021 net income? Required 1

Complete the following table given below to record income taxes in 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in whole dollars.)

			Tax Rate %		Tax $	Recorded as:
Pretax accounting income	$300,000
Permanent difference	$(40)
Income subject to taxation	$299,960	x	25%		$74,990	Income tax expense
Temporary difference	$10	x	25%	=	$3	Deferred tax liability
Income taxable in current year	$299,970	x	25%	=	$74,993	Deferred tax asset

Required 1 GJ: Journal entry worksheet

Record 2021 income taxes.

Required 2: What is Southern Atlantics 2021 net income? (Enter your answer in whole dollars.)

Net income