You have been assigned to compute the income tax provision for Motown Memories, Inc. (MM) as of December 31, 2020. The Company’s Income Statement for 2020 is provided below:

Motown Memories, Inc.
Statement of Operations
					at December 31, 2020
Net sales					$50,000,000
Cost of sales					28,000,000
Gross profit					22,000,000
Compensation					2,000,000
Selling expenses					1,500,000
Depreciation and amortization					4,000,000
Other expenses					500,000
Total operating expenses					8,000,000
Income from operations					$14,000,000
Interest and other income					1,000,000
Income before income taxes					$15,000,000

You have identified the following permanent differences:

Interest income from municipal bonds: $50,000

 Nondeductible meals and entertainment expenses: $20,000

 Nondeductible fines: $5,000 

MM prepared the following schedule of temporary differences from the beginning of the year to the end of the year:

Motown Memories, Inc.
Temporary Difference Scheduling Template
		Beginning	Current	EOY	Ending
Taxable		Deferred	Year	Cumulative	Deferred
Temporary Differences		Taxes	Change	T/D	Taxes
Accumulated depreciation		(1,680,000)	(1,000,000)	(9,000,000)	(1,890,000)

		Beginning	Current	EOY	Ending
Deductible		Deferred	Year	Cumulative	Deferred
Temporary Differences		Taxes	Change	T/D	Taxes
Allowance for bad debts		42,000	50,000	250,000	52,500
Reserve for warranties		21,000	20,000	120,000	25,200
Inventory §263A adjustment		50,400	60,000	300,000	63,000
Deferred compensation		10,500	10,000	60,000	12,600
Accrued pension liabilities		630,000	250,000	3,250,000	682,500
Total		753,900	390,000	3,980,000	835,800

a. Compute MM’s current income tax expense or benefit for 2020.

b. Compute MM’s deferred income tax expense or benefit for 2020.

c. Prepare a reconciliation of MM’s total income tax provision with its hypothetical income tax expense of 21 percent in both dollars and rates.