Problem 13-18 (LO. 2) Penguin Corporation (a cash basis, calendar year taxpayer) recorded the following income and expenses in the current year. Income from services Salaries paid to employees Tax-exempt interest income Dividends from a corporation in which Penguin holds a 12% interest Short-term capital loss on the sale of stock Estimated Federal income taxes paid $400,000 70,000 24,000 Gross income 40,000 17,000 110,000 Penguin purchased 7-year MACRS property in the current year for $80,000 (current year percentage 14.29% ); it did not claim any § 179 - additional first-year depreciation. The property has a 10-year ADR midpoint life. a. Determine taxable income and current E & P for Penguin Corporation. When required, round your answers to the nearest dollar. 440,000 ✓
Problem 13-18 (LO. 2) Penguin Corporation (a cash basis, calendar year taxpayer) recorded the following income and expenses in the current year. Income from services Salaries paid to employees Tax-exempt interest income Dividends from a corporation in which Penguin holds a 12% interest Short-term capital loss on the sale of stock Estimated Federal income taxes paid $400,000 70,000 24,000 Gross income 40,000 17,000 110,000 Penguin purchased 7-year MACRS property in the current year for $80,000 (current year percentage 14.29% ); it did not claim any § 179 - additional first-year depreciation. The property has a 10-year ADR midpoint life. a. Determine taxable income and current E & P for Penguin Corporation. When required, round your answers to the nearest dollar. 440,000 ✓
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 5BCRQ
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![Problem 13-18 (LO. 2)
Penguin Corporation (a cash basis, calendar year taxpayer) recorded the following income and expenses in the current year.
Income from services
Salaries paid to employees
Tax-exempt interest income
Dividends from a corporation in which
Penguin holds a 12% interest
Short-term capital loss on the sale of stock
Estimated Federal income taxes paid
Gross income
Penguin purchased 7-year MACRS property in the current year for $80,000 (current year percentage 14.29%); it did not claim any 5 179
additional first-year depreciation. The property has a 10-year ADR midpoint life.
a. Determine taxable income and current E & P for Penguin Corporation. When required, round your answers to the nearest dollar.
Less: operating expenses
Taxable income before dividends received deduction
Less: dividends received deduction
Taxable income
Show Transcribed Text
Taxable income
$400,000
70,000
24,000
Add: total additions to E & P
40,000
17,000
110,000
b. Determine Penguin's current E & P.
Current E & P
Less: total deductions from E & P
3
440,000 ✓
81,432 ✔
358,568 ✔
-28,000 X
330,568 X
C
330,568 X
7,432 X
127,000
263,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F07d0d3c1-5c3d-435a-b7ba-ab1b9b81adbf%2F13c8955b-ebf0-47f1-a204-a2818e4003bc%2Fk1vy8vs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 13-18 (LO. 2)
Penguin Corporation (a cash basis, calendar year taxpayer) recorded the following income and expenses in the current year.
Income from services
Salaries paid to employees
Tax-exempt interest income
Dividends from a corporation in which
Penguin holds a 12% interest
Short-term capital loss on the sale of stock
Estimated Federal income taxes paid
Gross income
Penguin purchased 7-year MACRS property in the current year for $80,000 (current year percentage 14.29%); it did not claim any 5 179
additional first-year depreciation. The property has a 10-year ADR midpoint life.
a. Determine taxable income and current E & P for Penguin Corporation. When required, round your answers to the nearest dollar.
Less: operating expenses
Taxable income before dividends received deduction
Less: dividends received deduction
Taxable income
Show Transcribed Text
Taxable income
$400,000
70,000
24,000
Add: total additions to E & P
40,000
17,000
110,000
b. Determine Penguin's current E & P.
Current E & P
Less: total deductions from E & P
3
440,000 ✓
81,432 ✔
358,568 ✔
-28,000 X
330,568 X
C
330,568 X
7,432 X
127,000
263,000
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