Corporation W, which uses the accrual method of accounting, had earnings and profits of $95,000 on December 31, Year 1. Based on the following information, compute earningsand profits as of December 31, Year 2:

Taxable income per return $185,000

Contributions in excess of 10% limitation 1,500

Interest paid for tax-exempt bonds 1,000

Tax-exempt interest received 3,000

Federal income taxes 55,400

MACRS depreciation from post-1986 property

acquisitions on return in excess of straight-line

alternative depreciation system 1,500

		$226,600
		$220,600
		$282,000
		$228,600