C:5-32 Accumulated Earnings Tax. Howard Corporation conducts a manufacturing business and has a compelling need to accumulate earn- ings. Its January 1, E&P balance is $600,000. It reports the following op- erating results for the current year: Taxable income $700,000 Federal income taxes 147,000 Dividends paid: July 15 of the current year 50,000 February 10 of the following year 100,000 Other information relating to Howard's current year operations is as follows: NOL carryover from last year deducted in the current year $100,000 Net capital gain 100,000 Dividends received from 10%-owned domestic corporation 75,000 Current year E&P before dividend payments is $400,000. Howard can justify the retention of $120,000 of current E&P to meet the reasonable needs of its business. a. What is Howard's accumulated taxable income? b. What is Howard's accumulated earnings tax liability