Western Corporation, a calendar year, accrual basis corporation, reported $500,000 of net income after tax on its 2018 financial statements prepared in accordance with GAAP.

The corporations books and records reveal the following information:

Westerns book income included $15,000 of dividends, received from a domestic corporation in which Western owns less than 1 percent of the outstanding stock.

Westerns depreciation expense per books was $55,000, and its MACRS depreciation was $70,000.

Western earned $5,000 of interest from municipal bonds and $6,000 of interest from corporate bonds.

Westerns capital losses exceeded its capital gains by $2,000.

Westerns federal income tax expense per books was $103,000.

Compute Westerns federal taxable income and regular tax liability.

Prepare a Schedule M-1, page 5, Form 1120, reconciling Westerns book and taxable income.