Reference no: EM131796247

Webster, Inc. has the following items of items of income and expense for 2016, it first year of operations. Webster began operations on April 1 and uses a calendar year end.

Gross receipts from sales $ 1,391,222

Charitable contributions 15,000

Employment taxes 10,250

Interest expense 30,000

Organizational costs 52,600

Office rent expense 31,000

Real estate taxes 15,600

Utilities expense 11,300

Wage expense 9,3540

In addition to these items, Webster purchased machinery and equipment costing $1,430,000 and furniture costing $112,000 on April 9, 2016, and a warehouse costing $190,000 on May 2, 2016.

Webster wants to minimize its 2016 income tax liability, which means electing section 179 expense for the maximum the tax law allows, as well as taking the 50% bonus depreciation. Compute Webster's 2016 taxable income and income tax liability.