ABC Company has the following book income: Sales 500,000 Cost of Goods 220,000 I
ID: 2378141 • Letter: A
Question
ABC Company has the following book income:
Sales 500,000
Cost of Goods 220,000
Interest income 12,000
Tax exempt interest 5,000
Capital gains 15,000
Capital losses (22000)
Proceeds from keyman
Life insurance 29,000
Depreciation expense 10,000
(The company wants to take the section 179 expense deduction of $20000 on its tax return instead of the $10000 shown on the books.
Charitable contributions 35,000
How much is taxable income? Show computations Please!
Explanation / Answer
income statement income from business sales 500000 cogs -220000 dep -10000 270000 capital gains gains 15000 losses -22000 carried forward 7000 0 other sources interest 12000 lic 29000 41000 total income 311000 deductions -35000 -20000 taxable income 256000