Owl Inc.'s income before taxes is $255,000, including $15,000 of municipal bond interest income, $2,000 in City of Philadelphia parking tickets, and $5,000 in bank penalties for their late mortgage payments. If Owl's tax rate is 35%, what's income tax expense?

$86,450

$84,700

$89,250

$93,800

Owl Co. had income before taxes of $675,000 and a tax rate of 40% in their first year of operation. Included in this income is $5,000 of life insurance premiums that Owl can never deduct on their tax returns and depreciation expense of $185,000. Depreciation on Owl's tax return is $130,000. Which of the following will be included in Owl's year-end adjustments?

Deferred tax liability of $20,000

Deferred tax asset of $20,000

Income tax payable of $294,000

Income tax expense of $270,000