Nash Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $49,800 in 2021, $54,700 in 2022, and $59,300 in 2023. Nash’s pretax financial income for 2020 is $285,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020.

(a)

Compute taxable income and income taxes payable for 2014.

(b)

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.

(c)

Prepare the income tax expense section of the income statement for 2014, beginning with the line ?Income before income taxes.?

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?