Special Corporation reported net income of $250,000 for 20X5 and paid dividends of $50,000. Power Company owns 40 percent of Special's shares and uses the equity method in accounting for its investment. Power Company reports taxable income of $300,000 on its separate operations and has an effective tax rate of 35 percent. Eighty percent of dividends received from Special are exempt from income tax.

Required 

Compute the following: 

a. Income tax expense for 20X5. 

b. Income taxes payable for 20X5.