Boilermaker Incorporated reported taxable income of $615,000 this year and paid federal income taxes of $129,150. Not included in the company’s computation of taxable income is tax-exempt income of $41,750, disallowed meals and entertainment expenses of $48,500, and disallowed expenses related to the tax-exempt income of $1,800. Boilermaker deducted depreciation of $126,000 on its tax return.

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
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Boilermaker Incorporated reported taxable income of $615,000 this year and paid federal income taxes of $129,150. Not included in the company’s computation of taxable income is tax-exempt income of $41,750, disallowed meals and entertainment expenses of $48,500, and disallowed expenses related to the tax-exempt income of $1,800. Boilermaker deducted depreciation of $126,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $83,500. Compute the company’s current E&P. (Negative amount should be indicated with a minus sign.)

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