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

a. What is Beach€™s taxable income?
b. What is Beach€™s current E&P?

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Inc ome 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 U.S. production activities deduction 1,500 Penalty on late payment of federal taxes 450