ABC Corporation will commence operations on January 1, 2013. The company projects the following financial performance during its first year of operation:

• Sales revenues are estimated at $2,500,000.
• Labor, material, and overhead costs are projected at $800,000.
• The company will purchase a warehouse worth $500,000 in February. To finance this warehouse, on January 1 the company will issue $500,000 of long‐term bonds, which carry an interest rate of 10%. The first interest payment will occur on December 31.
• For depreciation purposes, the purchase cost of the warehouse is divided into $100,000 for the land and $400,000 for the building. The building is classified into the 39‐year MACRS real‐property class and will be depreciated accordingly.

On January 5, the company will purchase $200,000 of equipment that has a five‐year MACRS class life.

(a) Determine the total depreciation expenses allowed in 2013.
(b) Determine ABC’s tax liability in 2013.