Manistee Corporation reported taxable income of $1,200,000 this year and paid federal income taxes of $408,000. Not included in the computation was disallowed entertainment expenses of $25,000, tax-exempt interest of $20,000, and a net capital loss of $50,000 incurred this year. Manistee is an accrual basis taxpayer. The corporations current earnings and profits this year would be:

• $1,200,000

• $1,145,000

• $787,000

• $737,000

• Please show the answer with calculations. Thanks!