Beach Corporation, an accrual basis taxpayer, reports the following results for

Question

Beach Corporation, an accrual basis taxpayer, reports the following results for the current year:

Income:
Gross profit from manufacturing operations $250,000
Dividends received from 25%-owned domestic corporation 20,000
Interest income: Corporate bonds 10,000
Municipal bonds 12,000
Proceeds from life insurance policy on key employee 100,000
Section 1231 gain on sale of land 8,000
Expenses:
Administrative expenses 110,000
Bad debts 5,000
Depreciation:
Financial accounting 68,000
Taxable income 86,000
Alternative depreciation system (for E&P) 42,000
NOL carryover 40,000
Charitable contributions: Current year 8,000
Carryover from last year 3,500
Capital loss on sale of stock 1,200
US production activities deduction 1,500
Penalty on late payment of federal taxes 450

Task(s):
a. What is Beach

Explanation / Answer

Beach’s taxable income = $86,000 you see from given profit and loss statement taxable income is given as $86000 so taxable income = $86000 b) Beach’s current E&P =$8000 as it is given in above statement

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