The following summarizes information relating to Grafton Corporation’s operations for the current year:

Required:

Compute the amount of taxes payable and income tax expense for Grafton Corporation.

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Sales revenue Dividend income (not taxable) Operating expenses other than depreciation Depreciation Income before tax Capital cost allowance claimed Income tax rate $4,500,000 100,000 (3,200,000) (800,000) $ 600,000 $1,000,000 25%