In 1999, TI Corporation had sales of $2 million, cost of goods sold of $1 million, and depreciation of $500,000. The firm received

$300,000 in dividends and $100,000 in interest income, and paid

$150,000 in dividends and $200,000 in interest. It bought equipment for $300,000. The firm’s tax rate was 30%, and the dividendsreceived deduction was 70%.

a. What was the taxable income of TI Corporation?

b. How much must TI pay in taxes?