Mozart Inc.'s \($98,000\) taxable income for 2008 will be taxed at the 40% corporate tax rate. For tax purposes, its depreciation expense exceeded the depreciation used for financial reporting purposes by \($27,000\). Mozart has \($45,000\) of purchased goodwill on its books; during 2008, the company determined that the goodwill had suffered a \($3,000\) impairment of value for financial reporting purposes. None of the goodwill impairment is deductible for tax purposes. Mozart purchased a three-year corporate liability insurance policy on July 1, 2008 for \($36,000\) cash.
The entire premium was deducted for tax purposes in 2008.
Required:
1. Determine Mozart's pre-tax book income for 2008.
2. Determine the changes in Mozart’s deferred tax amounts for 2008.
3. Calculate tax expense for Mozart Inc. for 2008.