The following facts relate to Xylo Corporation. 3

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1. Deferred tax liability, January 1, 2012, $0.

2. Deferred tax asset, January 1, 2012, $24,000.

3. Taxable income for 2014, $265,000.

4. Pretax financial income for 2014, $345,000.

5. Cumulative temporary difference at December 31, 2014, giving rise to future taxable amounts, $140,000.

6. Cumulative temporary difference at December 31, 2014, giving rise to future deductible amounts, $120,000.

7. Tax rate for all years, 40%.

8. The company is expected to operate profitably in the future.

Instructions PLEASE SHOW ALL CALCULATIONS

(a) Compute income taxes payable for 2014.

(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.