Abbott Corporation has book income before federal income tax of $380,000. Deductions in arriving at book income included: charitable donation, $60,000; parking fines for delivery vehicles, $2,200; meals and entertainment expense, $13,400; depreciation expense, $37,300. MACRS depreciation is $40,720. Book income includes dividends from large public corporations of $20,000. Abbott has an NOL carryover to the current year of $12,000.
a) Compute Abbottâ€™s taxable income.
b) Compute Abbottâ€™s tax liability.