Beach Corporation, an accrual basis taxpayer, reports the following results for the current year:

Income:

Gross profit from manufacturing operations $250,000

Dividends received from 25%-owned domestic corporation 20,000

Interest income: Corporate bonds 10,000

Municipal bonds 12,000

Proceeds from life insurance policy on key employee 100,000

Section 1231 gain on sale of land 8,000

Expenses:

Administrative expenses 110,000

Bad debt 5,000

Depreciation:

Financial accounting 68,000

Taxable income 86,000

Alternative depreciation system (for E&P) 42,000

NOL carryover 40,000

Charitable contributions: Current year 8,000

Carryover from last year 3,500

Capital loss on sale of stock 1,200

U.S. production activities deduction 1,500

Penalty on late payment of federal taxes 450

a.What is Beach's taxable income?

b.What is Beach's current E&P?