Bali Inc. reported $605,800 net income before tax on this years financial statements prepared in accordance with GAAP. The corporations records reveal the following information: Depreciation expense per books was $53,000, and MACRS depreciation was $27,400. Bali sold business equipment for $100,000 cash. The original cost of the equipment was $125,000. Book accumulated depreciation through date of sale was $48,000, and MACRS accumulated depreciation through date of sale was $63,000. Bali sold investment land to Coroda, a corporation owned by the same person that owns Bali. The amount realized on sale was $115,000, and Balis basis in the land was $40,000. Bali sold marketable securities to its sole shareholder. The amount realized on sale was $51,450, and Balis basis in the securities was $75,000. Compute Bali's taxable income. how did they get these answers ($23,000) and $38,000

Bali's net book income before taxes $605800

Excess of book over tax depreciation 25600

Book gain on equipment sale $(23000)

Tax gain on equipment sale 38000

15000

non deductible loss on sale to related party 23550

Bali's taxable income $669950