Required information [The following information applies to the questions displayed below.] XYZ is a calendar-year corporation that began business on January 1,2022 . For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. 1. XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1,000,000 of income for the year. XYZ accounted for its investment in HC under the equity method, and it recorded its pro rata share of HC 's earnings for the year. HC also distributed a $200,000 dividend to XYZ. For tax purposes, HC reports the actual dividend received as income, not the pro rata share of HC 's earnings. 2. Of the $35,200 interest income, $8,800 was from a City of Seattle bond, $10,800 was from a Tacoma City bond, $9,800 was from a fully taxable corporate bond, and the remaining $5,800 was from a money market account. 3. This gain is from equipment that XYZ purchased in February and sold in December (i.e., it does not qualify as 1231 gain). 4. This includes total officer compensation of $2,500,000 (no one officer received more than $1,000,000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (recipients are officers). 6. XYZ actually wrote off $36,500 of its accounts receivable as uncollectible. 7. Tax depreciation was $2,375,000. 8. In the current year, XYZ did not make any actual payments on warranties it provided to customers. 9. XYZ made $500,000 of cash contributions to charities during the year 10. On July 1 of this year, XYZ acquired the assets of another business. In the process, it acquired $357,000 of goodwill. At the end of the vear. XYZ wrote off $39.500 of the aoodwill as impaired. Required: a. Compute XYZ 's taxable income. b. Compute XYZ 's income tax liability