Tor Corporation is subject to income tax rates of 20 percent on its first $50,000 pretax income and 34 percent on amounts in excess of $50,000. Quarterly pretax accounting income for the calendar year is estimated by Tor to be as follows:

Quarter ... Estimated Pretax Income

First ........... $ 20,000

Second ............ 30,000

Third ........... 60,000

Fourth ............ 50,000

Total .......... $160,000

No changes in accounting principles, discontinued items, unusual or infrequently occurring items, or extraordinary items are anticipated for the year. The fourth quarter’s pretax income is, however, expected to include $20,000 in dividends from domestic corporations, for which an 80 percent dividend-received deduction is available.

REQUIRED

1. Calculate the estimated annual effective tax rate for Tor Corporation for 2011.

2. Prepare a schedule showing Tor’s estimated net income for each quarter and the calendar year 2011.