Appa, Inc. is an accrual basis taxpayer. The following adjusted revenue and expense accounts appeared on Appa$$s accounting records for the year ended December $31,2023.$

Revenues

Net sales $2,000,000$

Dividends $50,000$

Interest $22,000$

Gain on the sale of stock $20,000$

Total $2,092,000$

Expenses

Cost of goods sold $1,000,000$

Salaries and wages $400,000$

Interest expense $25,000$

Contributions $40,000$

Depreciation $($see note$)260,000$

Losses on the sale of stock $30,000$

Total $1,755,000$

Net income $337,000$

Additional information

$1)$ Interest expense consists of: $$20,000$ interest on funds Appa borrowed for working

capital and $$5,000$ interest on funds Appa borrowed to purchase municipal bonds.

$2)$ Interest revenue consists of interest Appa earned on

Corporate bonds purchased in $2023$ $$20,000$

Municipal bonds purchased in $2023$ $$2,000$

$3)$ On January $2,2023,$ Appa, Inc. began active operations. In connection with creating the

business, Appa incurred the following organizational expenditures:

Legal fees $$30,000$

State incorporation fees $$2,000$

Brokers commission on the sale of stock $$15,000$

$4)$ Appa had gains from the following sales of stock of unrelated corporations.

Kyoshi Corp. $($purchased February $2023$; sold April $2023)$ $$15,000$

Gyatso Corp. $($purchased June $2023$; sold September $2023)$ $$5,000$

$5)$ All losses from the sale of stock are classified as long$-$term capital losses.

$6)$ Appa received dividends from a taxable domestic corporation, whose stock is traded on

a major stock exchange. Appa owns $10\%$ of the stock of the domestic corporation.

$7)$ Appa$$s Board of Directors authorized a $$40,000$ contribution to a qualified charity on

December $1,2023.$ Appa made the payment on February $1,2024.$ All charitable

contributions were properly substantiated. Note, the limitation on the deduction for

qualifying charitable contributions $($if any$)$ is calculated on taxable income before

charitable contributions and dividends received deduction.

Determine the amount that should be reported on Appa, Inc.$$s $2023$ federal income tax return.

$1.$ What is the amount of interest expense that Appa, Inc. can deduct on its tax return?

$2.$ What is the amount of interest income that Appa must include in its gross income?

$3.$ What is the allowable amount of organizational expenditures that Appa can deduct on its tax return?

$4.$ How much of the capital gains must Appa include in its gross income?

$5.$ How much of the capital losses can Appa deduct on its tax return?

$6.$ What is the amount of Appa$$s dividends received deduction?

$7.$ What is Appa$$s maximum charitable contribution deduction?