Kline Company an accrual basis calendar year corporation reported $560000 net

Kline Company an accrual basis calendar year corporation reported $560000 net income before tax on its financial statements prepared in
accordance with GAAP for 2012. Kline%u2019s records reveal the following information: (Kline%u2019s MTR is 35%. and all items have been properly reported under
GAAP).

. The allowance for bad debts as of January 1 2012 was $80000. Write-offs for the year totaled $20000 and the addition to the allowance
for the year was $50000. The allowance as of December 31 was $110000.

. Kline paid $75000 fine to the State of New Jersey for a violation of state pollution control laws.

. Kline%u2019s lawyers established an estimated fund for a pending lawsuit which they expect to cost the company $125000. This liability
meets the fixed and determinable standard relating to contingent liabilities under GAAP . Kline actually paid out $120000 relating to this law suit in
2012.

. Kline received $45000 in Municipal Bond interest that is not taxable.

Kline had tax depreciation of $89000 and book depreciation of $94000

Compute Kline%u2019s taxable income and prepare the required journal entry to record the tax
expense tax payable and deferred account if any.