The following facts relate to Alschuler Corporation.

1. Deferred tax liability, January 1, 2012, $40,000.
2. Deferred tax asset, January 1, 2012, $0.
3. Taxable income for 2012, $115,000.
4. Pretax financial income for 2012, $200,000.
5. Cumulative temporary difference at December 31, 2012, giving rise to future taxable amounts, $220,000.
6. Cumulative temporary difference at December 31, 2012, giving rise to future deductible amounts, $35,000.
7. Tax rate for all years, 40%.
8. The company is expected to operate profitably in the future.

Instructions
  (a) Compute income taxes payable for 2012.
  (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2012.
  (c) Prepare the income tax expense section of the income statement for 2012, beginning with the line “Income before income taxes.”