The following information is available for Buffalo Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $126,000. This difference will reverse in equal amounts of $31,500 over the years 2021–2024.
2. Interest received on municipal bonds was $10,500.
3. Rent collected in advance on January 1, 2020, totaled $63,900 for a 3-year period. Of this amount, $42,600 was reported as unearned at December 31, 2020, for book purposes.
4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years.
5. Income taxes of $309,000 are due per the tax return for 2020.
6. No deferred taxes existed at the beginning of 2020.

Required:
a. Compute taxable income.
b. Compute pretax financial income