Bio Tech Computer Company reports pretax financial income of $500,000, $600,000, and $500,000 in each of the years 2019, 2020, and 2021 respectively. The company is subject to a 30 percent tax rate and has the following differences between pretax financial income and taxable income.
1. Bio Tech recognizes sales revenue of $72,000 from installment sales for book purposes in 2019. However, Bio Tech will recognize sales revenue for tax purposes in equal amounts over the next three years beginning January 1, 2020.
2. During 2019, Bio Tech estimates its warranty costs related to sales of computers to be $75,000, will be paid evenly over the next three years.
3. Bio Tech pays life insurance premium for its key officers of $10,000 in 2020 and 2021.
4. Bio Tech receives interest on municipal bonds of $8,000 in 2019.
Required:
Calculate Bio Tech's current earnings and profits for 2021.