The following schedule reconciles Celebrity Co.s pretax GAAP income to its taxable income for the current year:

Pretax GAAP income $104,000

Nondeductible expense for fines 3,100

Tax deductible depreciation in excess of GAAP depreciation expense (18,000)

Taxable rental receipts in excess of GAAP rental revenue 13,000

Taxable income $102,100

Assuming a tax rate of 25%, what is the increase in income taxes payable for the current year?

a. $25,525

b. $26,775

c. $24,275

d. $26,000