Millie Co. completed its first year of operations on December 31, 2017, with pre-tax financial income of $400,000. Millie accrued a contingent liability of $900,000 for financial reporting purposes; however, the $900,000 will be paid and therefore is deductible for tax purposes in 2018. Millie also has gross profit of $800,000 from certain sales recognized currently for financial reporting purposes but that will be taxable as installment sales in 2018 and 2019 when the cash is received ($400,000 each year). Millie’s pre-tax financial income includes $38,000 interest earned on its holdings of the bonds of the State of Montana. The tax rate is 35% for all years. Required: Determine Millie’s taxable income and taxes due for 2017. Determine the changes in Millie’s deferred tax amounts for 2017. Calculate tax expense for Millie for 2017.