______ Cableco Estimated Its Annual Effective Income Tax Rate to Be

______ Cableco estimated its annual effective income tax rate to be 40% at the end of its first quarterly interim period for 2006. At the end of the third quarter for 2006, Cableco revised its estimated annual effective income tax rate to be 36%. Cableco had pretax income of $1,000,000 for each of the first three quarters and expects earnings for the fourth quarter to be $2,000,000. What amount should be reported for income tax expense for the third quarter in the third quarter interim report?

A) $280,000
B) $320,000
C) $360,000
D) $400,000
E) None of the above.