3. War Eagle, Inc. reported the following for 20X3:a. taxable income of $2,000,000 b. paid federal income taxes of $420,000.c. a net operating loss carryover of $1 00,000 d. Section 179 expensed of $300,000 last yeare. Actual business interest expense for book was $2 0,000, but for tax, they could only deduct $15,000 because of the limitation on business interest expense.f. Increase in LIFO recapture of $12,000g. Tax Exempt Income of $1,000h. Operating expenses for tax were $1 00,000, which included $10,000 of MACRS depreciation for tax. Depreciation under the alternative ( E&P) depreciation method was $15,000. Compute the company's current E&P for 20X3.
3. War Eagle, Inc. reported the following for 20X3:a. taxable income of $2,000,000 b. paid federal income taxes of $420,000.c. a net operating loss carryover of $1 00,000 d. Section 179 expensed of $300,000 last yeare. Actual business interest expense for book was $2 0,000, but for tax, they could only deduct $15,000 because of the limitation on business interest expense.f. Increase in LIFO recapture of $12,000g. Tax Exempt Income of $1,000h. Operating expenses for tax were $1 00,000, which included $10,000 of MACRS depreciation for tax. Depreciation under the alternative ( E&P) depreciation method was $15,000. Compute the company's current E&P for 20X3.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 24CE
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Transcribed Image Text:3. War Eagle, Inc. reported the following for 20X3:a.
taxable income of $2,000,000 b. paid federal income
taxes of $420,000.c. a net operating loss carryover of $1
00,000 d. Section 179 expensed of $300,000 last
yeare. Actual business interest expense for book was $2
0,000, but for tax, they could only deduct $15,000
because of the limitation on business interest expense.f.
Increase in LIFO recapture of $12,000g. Tax Exempt
Income of $1,000h. Operating expenses for tax were $1
00,000, which included $10,000 of MACRS
depreciation for tax. Depreciation under the alternative (
E&P) depreciation method was $15,000. Compute the
company's current E&P for 20X3.
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