E$18\mathrm{.}1$B $($LO $1,2)($One Temporary Difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes$)$ Allied Corporation has one temporary difference at the end of $2025$ that will reverse and cause deductible amounts of $$40,000$ in $2026,$ and $$70,000$ in $2027.$ Allied's pretax financial income for $2025$ is $$125,000,$ and the tax rate is $30\%$ for all years. There are no deferred taxes at the beginning of $2025.$

Instructions

a$.$ Compute taxable income and income taxes payable for $2025.$

b$.$ Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for $2025.$

c$.$ Prepare the income tax expense section of the income statement for $2025,$ beginning with the line "Income before income taxes"