Clarke has a controlling interest in Rogers's outstanding stock. At the current year-end, the following information has been accumulated for these two companies:

	Separate Operating Income	Dividends Paid
Clarke	$647,500	$100,000
	(includes a $156,000 net unrealized gross profit on intra-entity inventory transfers)
Rogers	245,000	70,000

Clarke uses the initial value method to account for the investment in Rogers. The separate operating income figures just presented include neither dividend nor other investment income. The effective tax rate for both companies is 40 percent.

d.	Assume that Clarke owns 70 percent of Rogers's voting stock, requiring separate tax returns. What is the total amount of income tax expense to be recognized in the consolidated income statement for the current period?

e.	Assume that Clarke owns 70 percent of Rogers's voting stock so that separate tax returns are required. What amount of income taxes does Clarke have to pay for the current year?