28. LO.1, 3, 4 Willingham, Inc., an accrual basis C corporation, reports pretax book income of $1,600,000. At the beginning of the year, Willingham reported no deferred tax assets or liabilities on its balance sheet. At the end of the year, Willingham’s depreciable assets had a net book value of $15,000,000. It is subject to a 21% U.S. income tax rate in the current year and for the foreseeable future.

Willingham’s book-tax differences include the following. Compute the entity’s current and deferred Federal income tax expense for the year.

Estimate of uncollectible accounts at year end $4,000,000 Tax depreciation in excess of book 3,000,000 Book gain from installment sale of nonbusiness asset, deferred for tax 2,000,000 Interest income from school district bonds 200,000