Calculating Taxable Income and E&P

Fill in the blank:

Z corporation has the following income and expenses and operates on a cash basis:

Gross profit of $20,000

Salaries of $10,000

Tax-exempt interest of $2,000

Dividends received from X corporation of $5,000

Dividends received deduction of $2,500

Depreciation under Section 168(a) of $6,000

A long term capital gain of $2,500

A long term capital loss of $5,000

A long term capital loss carryforward of $2,000

Federal income taxes paid of $1000

Note that depreciation would have only been $4,000 if the Section 168(g)(2) alternative depreciation system was used.

1. Z corporation's taxable income is equal to $-blank-.
2. Z corporation's current earnings and profits are equal to $-blank-.To calculate that starting from taxable income, X corporation must add $-blank-in tax exempt interest, $-blank-for dividends received, and a net $-blank-of depreciation.It also must subtract $-blank-in long term capital losses and $-blank-in federal income taxes paid.