Redbird Corporation, a calendar year taxpayer, receives dividend income of $250,000 from a corporation in which it holds a 10% interest. Redbird also receives interest income of $35,000 from municipal bonds. (The municipality used the proceeds from the bond issue to construct a library.) Redbird borrows funds to purchase the municipal bonds and pays $20,000 of interest on the loan. Excluding the items noted above, Redbird's taxable income is $500,000.
a. What is Redbird Corporation's taxable income after dividend income, interest from the municipal bonds, and interest paid on loan have been taken into account?
b. What is Redbird Corporation's accumulated E&P at the end of the yar if the beginning balance is $150,000