Corporate operations through July 31 are expected to generate a $30,000 current loss. The corporate net operating loss carryforward into the year is $70,000. Calculate Wheeler's federal corporate income tax liability, and explain any assumptions that you used in making the calculation. Ignore state, local, and other corporate income taxes. Wheeler is not subject to the alternative minimum tax.

Wheeler Electrical Supplies, Inc. Projected Balance Sheet July 31 Fair Market Value ASSETS Tax Basis Cash Trade accounts receivable Inventory Furniture and fixtures $ 2,000 2,000 42,000 48,000 80,000 45,000 30,000 $ 200,000 Accumulated (120,000) $ 450,000 depreciation 80,000 Building and plant 230,000 Accumulated (320,00130,000 175,000 depreciation Land 150,000 Totals $ 462,000 552,000 LIABILITIES AND SHAREHOLDERS' EQUITY Tax Basis $ 20,000 Trade accounts payable Note payable - Joyce Mortgage on building and and, recourse 80,000 500,000 $ 600,000 Paid-in capital Retained earnings 20,000 (138,000) otals $ 482,000