Hertz Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the year ended December 31, 2013, its first year of operations: Pretax financial income $300,000 Nontaxable interest received on municipal securities (15,000) Estimated warranties not deductible for tax purpose in 2013 35,000 Depreciation in excess of financial statement amount (30 ,000) Taxable income $290,000 Hertzs tax rate for Year 2013 and for future years is 40%.