Collard Company had depreciation for tax purposes in 2021 of $25,000 but for book purposes only $20,000. Also in 2021, 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 2022. Collard also recognized $14,000 of interest income from its investments in tax exempt bonds which the Internal Revenue Service will never regard as income.

Taxes paid in 2021 were $125,000 with a tax rate of 20%

a. Determine the financial accounting (book) income for 2021

b. Determine the tax expense for 2021

c. Determine Collard's effective tax rate for 2021