[03] Farris Casinos Machines, Inc., [FCM] reported a pre-tax accounting income of $3,250,000 for the current year. The following additional information is given below.

For the current year, the change in the difference between net book value and UCC (undepreciated capital cost-tax value) of plant assets is $430,000 with the net book value being higher than the tax basis. There were no additions or disposals of plant assets in the year.

Of the reported pre-tax book income, $12,000 is interest earned from nontaxable municipal bonds.

At the beginning of the year, the companys estimated warranty liability was reported at $67,000. Actual repair costs paid amounted to $55,000 for the year. The companys estimated warranty liability at the end of the year was reported at $84,000.

FCM paid fines of $100,000 for non-compliance of existing regulations related to factory safety. Although the company was aware that such fines would not be accepted as valid tax deductions, these had been included in the determination of pretax income.

The tax rate for the year was 40%.

How much would be the income tax expense and the current income tax payable?

Select one:

a.

$1,300,000 and $1,128,000

b.

$1,335,200 and $1,170,000

c.

$1,335,200 and $1,342,000

d.

$1,264,800 and $1,300,000

e.

None of the above but some other number