At the end of its first year of operations on December 31, 2010, the Midland Company reported pretax financial income of $100,000. An investigation of that income revealed the following items: Bad debts expense of $12,000 was recognized. The accounts will be written off in 2011. Installment sales of $50,000 were recognized in financial income. These sales were accounted for by the installment sales method for income tax purposes. Only $20,000 was reported on the tax return. Warranty expenses of $16,000 were accrued for financial reporting purposes, but were not expected to result in a cash payment until 2011. Depreciation on the tax return exceeded depreciation for financial reporting purposes by $32,000. Be sure to show your work Required: Compute taxable income