Question - Given the following facts:

Income before income taxes (on the income statement) $500,000

Book depreciation (included in income before income taxes) $300,000

Tax depreciation $450,000

Bad debt expense (included in income before income taxes) $60,000

Accounts receivable written off this year $75,000

Product warranty expense (included in income before income taxes) $125,000

Cost of warranty claims satisfied this year $90,000

Rent income (included in income before income taxes) $60,000

Rent collected this year $75,000

State and local bond interest included in income before income taxes $35,000

Domestic production activities deduction for this year $40,000

Enacted income tax rate 35%

1. Compute the company's taxable income. Hint: Temporary book-to-tax differences are indicated with a T while permanent book-to-tax differences are indicated with a P.

2. Compute the company's income tax payable.

3. Compute the company's income tax expense.