For its first year of operations Trump Corporation's reconciliation of pretax accounting income to taxable income is as follows:
Pretax Accounting Income $300,000
Permanent Difference (15,000)
285,000
Temporary Difference-Depreciation ( 40,000)
Taxable Income $245,000
Trump's tax rate is 40%.
What should Trump report as its income tax expense in its first year of operations?
a) $120,000.
b) $114,000.
c) $98,000.
d) $16,000