Jenny Corporation recorded warranty accruals as at December 31, 2014, in the amount of $150,000. This reversing difference will cause deductible amounts of $50,000 in 2015, $35,000 in 2016, and $65,000 in 2017. Jenny's accounting income for 2014 is $135,000 and the tax rate is 25% for all years. There are no deferred tax accounts at the beginning of 2014.

Instructions

(a) Calculate the deferred tax balance at December 31, 2014.

(b) Calculate taxable income and current income tax payable for 2014.

(c) Prepare the journal entries to record income taxes for 2014.

(d) Prepare the income tax expense section of the income statement for 2014, beginning with the line "Income before income tax."