The following information for 2009 relates to Sparrow Corp., a calendar year,accural method taxpayer.

Net income per books (after-tax) $134,700
Federal income tax expense per books 59,300
Tax-exempt interest income 6,000
MARCs depreciation in excess of straight-line
depreciation used for financial statement purpose 8,000
Charitable contribution in excess of taxable in-
come limitation 7,000
Premiums paid on life insurance policy on the
president (Sparrow is beneficiary of policy) 5,000
Interest on loan to purchase tax-exempt bonds 3,000
Based on the above information use Schedul M-1

of Form 1120 which is available on the IRS web site, to determine Sparrow's taxable income for 2009.