Boilermaker Incorporated reported taxable income of $500,000 this year and paid federal income taxes of $105,000. Not included in the company's computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000. Boilermaker deducted depreciation of $100,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $60,000. Compute the company's current E&P. Note: Negative amount should be indicated with a minus sign.

Boilermaker Incorporated reported taxable income of $500,000 this year and paid federal income taxes of $105,000. Not included in the company's computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000. Boilermaker deducted depreciation of $100,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $60,000. Compute the company's current E&P. Note: Negative amount should be indicated with a minus sign.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter24: Multistate Corporate Taxation

Section: Chapter Questions

Problem 38P

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Boilermaker Incorporated reported taxable income of $630,000 this year and paid federal income taxes of $132,300. Not included in the company's computation of taxable income is tax-exempt income of $48,500, disallowed meals and entertainment expenses of $47,500, and disallowed expenses related to the tax-exempt income of $2,500. Boilermaker deducted depreciation of $160,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $76,000. Compute the company's current E&P. (Negative amount should be indicated with a minus sign.) Depreciation Expenses related to tax-exempt income Federal income taxes Meals and entertainment Tax-exempt income Taxable income Current E&P $
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