in 2104, Rockin Horse Foundry purchased $125,000 of furnass equipment. Rockin Horse's taxable income for 2014 without considering the new equipment would have been $275,000. The new equipment falls into the MACRS five-year class. Assume the applicable tax rate is 35% and usethe following MARCS percentages for this asset - Yr 1: 20%; Yr 2: 32%; Yr 3: 19.2%; Yr 4: 11.5%;Yr 5: 11.5%; Yr 6: 5.8%)

1. What is the company's 2014 taxable income?
2. How much income tax with Rockin Horse pay?