For the fiscal year ended December 31, 2014, Rossland Ltd. (Rossland) has income before taxes of $325,000. Rossland’s tax return shows taxable income of $275,000 for that year. The accounting basis of Rossland’s assets exceeded the tax basis by $75,000 on December 31, 2014 and the balance in the future income tax account on December 31, 2013 was a credit of $10,000. All temporary differences pertain to non-current assets. Rossland has a tax rate of 15 percent.

Required:

a. What should Rossland report for future income taxes on its December 31, 2014 balance sheet?

b. What is Rossland’s net income for fiscal 2014?

c. What would Rossland’s net income be if it used the taxes payable method?

d. Explain the difference between

(b) and (c).

e. Prepare the journal entry required to record Rossland’s income tax expense for fiscal 2014.