The following facts apply to The Nelson Music Co., for the calendar year ended December 31, 2016: The company purchased new equipment at the beginning of 2016, at a cost of $140, 000. For accounting purposes, straight-line depreciation was used, assuming an eight-year useful life. For tax purposes, accelerated cost recovery of $31, 000 was allowed. Estimated warranty expenses of $8, 400 did not quality as a tax deduction because actual out-of-pocket expenditures related to repairs replacements had not been made. Pre-tax income on the income statement was $99, 800. On July 1, 2014, Nelson acquired all of the common stock of the Jennings Corporation at a cost of $675, 000. The fair value of Jennings' net assets at that date was $555, 000. The tax law permits amortization of goodwill over a period of 15 years. Nelson wrote off $21, 200 of goodwill in 2016 as unrealizable. Nelson paid $19, 000 in foreign import duties on inventory that was purchased in Grand Fenwick. The taxing authorities have an annual limitation on import duties from Grand Fenwick, with no carry-forward of the difference. The import-duty deduction was $14, 000. The company earned $4, 500 in interest on tax-exempt bonds (issued by a federal development agency) that was not taxable in 2016. Prepare a schedule supporting the computation of taxable income for the year 2016