The High End Company is a retail department store chain. The company’s fiscal year ends on the Saturday closest to January 31 of each year. The company is publicly held and submits quarterly financial statements to the shareholders.

Like most retail establishments, High End operates at a loss for most of the year, but generally recovers the losses in the fourth quarter to finish the year with a profit. In fiscal year 2005, the company reported pre-tax net income of $2,000,000, and paid taxes at a rate of 45%.

In the first quarter of 2006, the company suffered a loss of $1,500,000 before taxes. In the second quarter, economic conditions improved slightly, but the cumulative six-month loss was $2,600,000, the worst in the company’s history.

Nevertheless, management predicted that the losses would be recovered as the economy improved, and forecast a break-even performance for the year as a whole.

The loss did decline in the third quarter, to a cumulative loss of $1,300,000; the fourth quarter almost completely wiped out the loss, ending the year with a fiscal pre-tax loss of only $100,000.

Required:
Assume that tax losses can be carried back for only one year. Determine the provision for income taxes that should be reported on High End’s interim income statements for fiscal year 2006, assuming that each quarter is reported:

a. separately, not cumulatively

b. cumulatively