At December 3 1 . 2003, the records of Pearson Corporation provided the following information:

a. Income tax rate, 30 percent. Assume that 85 percent is paid in the year incurred.

b. Taxable income from the 2003 income tax return, $80,000.
Required: 1. Compute income taxes payable and deferred income tax for 2003. Is the deferred income tax a liability or an asset? Explain. 2. Show what amounts related to 2003 income taxes should be reported on the income statement and balance sheet.

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Income statement Revenues Depreciation expense (straight line) Remaining expenses (excluding income tax) Pretax income $160,000* (11,000) (90,000) $ 59,000