(Corporate income tax) Anderson & Williams, Inc. sells computer software and consulting services. The company's past years sales were $5 million. The cost of its merchandise sold came to $3 million. Operating expenses were $175,000, plus depreciation expenses totaling $125,000. The firm paid $200,000 interest on loans. The firm sold stock during the year, receiving a $40,000 gain on stock owned 6 years but losing $60,000 on stock held four months. Calculate the company's taxable income and tax liability

1. Taxable income
2. Tax liability