$5(20$ pts$)$

Collard Company had depreciation for tax purposes in $2025$ of $$25,000$ but for book purposes only $$20,000.$

Also in $2025,$ Collard recognized a loss from a contingency amounting to $$30,000$ which the Internal Revenue

Service does not allow until it actually occurs which is likely in $2026.$ Collard also recognized $$14,000$ of interest

income from its imvestments in tax exempt bonds which the Internal Reveunue Service will

never regard as income.

Taxes paid in $2025$ were $$125,000$ with a tax rate of $20\%.$

a$.$ Determine the financial accounting $($book$)$ income for $2025$

b$.$ Determine the tax expense for $2025.$

c$.$ Determine Collard's effective tax rate for $2025.$