1. In its first 3 years of operations, Konoka Company had taxable income of $90,000 in the first year, a loss of $570,000 in the second year, and income of $600,000 in the current year. The tax rate is 20% in the first 2 years and 28% in the current year. How much is the income tax liability in the current year?

1. ($600,000 ($600,000 x .80)) x .28
2. ($570,000 - ($570,000 x .80)) x .20
3. ($600,000 ($600,000 x .72)) x .28
4. ($600,000 ($600,000 x .80)) x .20