(Future income taxes, LO 7) For the fiscal year ended November 30, 2004 Vibank Ltd. (Vibank) has income before taxes of $4,500,000. Vibank’s tax return shows taxable income of $4,950,000 for that year. The tax basis of Vibank’s assets exceeded the accounting basis by $800,000 on November 30, 2004, and the balance in the future income tax account on November 30, 2003 was a credit of $300,000. Vibank has a tax rate of 30%.

Required:

a. Prepare the journal entry that Vibank should make to record its income tax expense for fiscal 2004.

b. What is Vibank’s net income for fiscal 2004?

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

d. Explain the difference between

(b) and (c).