The Talley Corporation had taxable operating income of $330,000 (i.e., earnings from operating revenues minus all operating costs). Talley also had (1) interest charges of $70,000, (2) dividends received of $25,000, and (3) dividends paid of $30,000. Its federal tax rate was 21% (ignore any possible state corporate taxes). Recall that 50% of dividends received are tax exempt.

What is the firms taxable income?

What is the tax expense?