1. ABC Company reported taxable income of $500,000 in 2020. This amount does not include a $5,000 nondeductible (for tax purposes) meal expense. If you start with taxable income of $500,000 what adjustment will be necessary for the $5,000 meal expense for purposes of calculating E&P?

   		a. a $5,000 addition.
   		b. a $5,000 deduction.
   		c. no adjustment.
   		d. none of the above.

2. ABC Company reported taxable income of $500,000 in 2020. This amount included a $15,000 deduction for tax depreciation. The companys book depreciation was $12,000. If you start with taxable income of $500,000 what adjustment will you need to make for depreciation for purposes of calculating E&P?

		a. a $3,000 addition.
		b. a $3,000 deduction.
		c. a $12,000 deduction.
		d. a $12, addition.
		e. none of the above.

3. ABC Company reported current year E&P of $400,000 in 2020. This amount included a $10,000 capital gain and $16,000 capital loss. If you start with E&P of $400,000 what adjustment will you need to make for capital losses for purposes of calculating taxable income?

		a. a $6,000 addition.
		b. a $6,000 deduction.
		c. no adjustment.
		d. none of the above.

4. ABC Company reported current year E&P of $400,000 in 2020. This amount included a $12,000 expense for payment of an OSHA violation fine. If you start with E&P of $400,000 what adjustment will you need to make for the fine for purposes of calculating taxable income?

		a. a $12,000 addition.
		b. a $12,000 deduction.
		c. no adjustment.
		d. none of the above.

5. ABC Company reported current year E&P of $400,000 in 2020. This amount included $100,00 of life insurance proceeds the company received because of the death of one of its officers (the company was the beneficiary of the officers life insurance policy). If you start with E&P of $400,000 what adjustment will you need to make for the life insurance proceeds for purposes of calculating taxable income?

1. 		a. a $100000 addition.
   		b. a $100,000 deduction.
   		c. no adjustment.
   		d. none of the above.