Question - Maxwell Corporation has income per books before tax of $400,000. Included in the income per books is $8,000 interest income from tax-exempt municipal bonds. In computing income per books, Maxwell deducted $22,000 for meal expenses, $3,300 for premiums on officers' life insurance policies (the corporation is the beneficiary for these policies), and $200 for fines.
1. What is Maxwell Corporation's taxable income?
2. What should Maxwell Corporation report as its income tax expense on its financial statements, assuming it uses a 21 percent tax rate?