Jaquelin Corporation (a calendar year taxpayer) has taxable income of $300,000,
ID: 2576685 • Letter: J
Question
Jaquelin Corporation (a calendar year taxpayer) has taxable income of $300,000, and its financial records reflect the following for the year.
Federal income taxes paid $110,000
Net operating loss carryforward deducted currently 70,000
Gain recognized this year on an installment sale from a prior year 44,000
Depreciation deducted on tax return (ADS depreciation would have been $10,000) 40,000
Interest income on Iowa state bonds 8,000
Jaquelin Corporation’s current E & P is:
a.
$254,000.
b.
$214,000.
c.
$194,000.
d.
$104,000.
a.
$254,000.
b.
$214,000.
c.
$194,000.
d.
$104,000.
Explanation / Answer
Taxable income 300000 Federal income tax -110000 Net operating loss carryforward deducted currently 70000 Gain recognized this year on an installment sale from a prior year -44000 Depreciation deducted on tax return 30000 Interest income on Iowa state bonds 8000 Current E & P 254000 Option A is correct
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