Mitchell Corporation provide the following accounting records for 2014:

1. Life insurance expense on officers was $9,000.
2. Equipment was acquired in January for $300,000. Straight-line depreciation over 5-year life is used, with no salvage value.
3. Interest revenue on State of Virginia bonds totaled $4,000.
4. Product warranties were estimated to be $50,000 in 201 Actual repair and labor costs related to the warranties in 2014 was $10,000. The remainder is estimated to be paid evenly in 2015 and 2016.
5. Gross profit on an accrual basis was $100,000. For tax purposes, $75,000 was recorded on the installment-sale method.
6. Fines incurred for pollution violation were $4,200.
7. Pre-tax financial income was $800,000. The tax rate is 30%.

8. What amount should be reported in its 2014 balance sheet as income taxes payable?

a. $223,260

b. $235,500

c. $240,000

d. $238,260

9. What amount should be reported in its 2014 income statement as income tax expense?

a. $242,760

b. $240,000

c. $235,500

d. $238,260