Wahlgren Reed Furniture, Inc. is an accrual method taxpayer that uses the calendar year as its tax year. Its gross sales for 2019 were $500,000, and its cost of goods sold was $150,000. In addition to its gross sales, at the end of the year it received $50,000 in advance payments for furniture to be constructed in January 2018. It received $6,000 in interest on a municipal bond, and it paid $5,000 in interest on a loan obtained to purchase the municipal bond.

In 2018, it purchased machinery with an estimated useful life of 10 years for $5,000. Wahlgren uses MACRS and the half-year conversion to depreciate the machinery. The machine has no salvage value.

Wahlgren had $6,000 of capital losses and $2,000 of capital gains for the year. Wahlgren paid $15,000 in research and experimental expenditures on October 1, 2019, and elected to amortize the expenditures over 60 months. It paid $3,000 in premiums for life insurance insuring a key employee and naming the corporation as the beneficiary. It paid $10,000 for meals and entertainment during the year. It received $20,000 in dividends from a U.S. corporation; it owned five percent of the stock of that corporation. Based on these facts, what are its net income and taxable income for the year?