Gator Incorporated reported taxable income of $1,150,000 this year and paid federal income taxes of $381,000. Included in the company's computation of taxable income is a $67,500 gain from the sale of a depreciable asset with an income tax basis of $135,000. The income tax basis of the asset was $135,000. The E&P basis of the asset using the alternative depreciation system was $234,500. Compute the company's current E&P. Note: Negative amount should be indicated with a minus sign. Taxable income Federal income taxes Regular tax gain from sale of asset E&P loss from sale of asset Current E&P $ 1,150,000 (32,000) $ 1,118,000

Gator Incorporated reported taxable income of $1,150,000 this year and paid federal income taxes of $381,000. Included in the company's computation of taxable income is a $67,500 gain from the sale of a depreciable asset with an income tax basis of $135,000. The income tax basis of the asset was $135,000. The E&P basis of the asset using the alternative depreciation system was $234,500. Compute the company's current E&P. Note: Negative amount should be indicated with a minus sign. Taxable income Federal income taxes Regular tax gain from sale of asset E&P loss from sale of asset Current E&P $ 1,150,000 (32,000) $ 1,118,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 5RE: Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year....

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