Find taxable income with table 7-2
Croyden is a calendar year, accrual basis corporation. Mr. and Mrs. Croyd en (cash basis taxpayers) are the sole corporate shareholders. Mr. Croyden is president of the corporation, and Mrs. Croyden is vice president. Croyden's financial records, prepared in accordance with GAAP, show the following information for the year. Use Table 72 Revenues from sales of goods Cost of goods sold (LIFO) Gross profit $12,900,808 9,268,0e $ 3,640,000 S24,000 Administrative salaries and wages612,00e 135,800 33,980 67,080 Bad debt expense State and local business taxes Interest expense Advertisin Annual property insurance premiums Annual 1life insurance premiums Depreciation expense Repairs, maintenance, utilities 19,800 7,388 148,800 81,080 Croyden's records reveal the following facts: Croyden's records reveal the following facts Under the UNICAP rules, Croyden had to capitalize $142,800 of administrative wages to inventory. These wages were expensed for financial statement purposes. . Because of the UNICAP rules, Croyden's cost of goods sold for tax purposes exceeds cost of goods sold for financial statement purposes by $219,000 debt expense equals the addition to the corporation's allowance for bad debts. Actual write-offs of uncollectible accounts during the year totaled $31.200. Administrative salaries Include an accrued $50,000 Mrs. Croyden. These bonuses were paid on January 17 of the following year year end bonus to Mr. Croyden and an accrued $20,000 year-end bonus to . The life insur ance premiums were on key-person policies for Mr and Mrs. Croyden. The corporation is the policy beneficiary Croyden disposed of two It sold office furnishings for $45,000. The original cost of the furnish assets during the year. (These dispositions are not reflected in the financial statement information shown.) f sale was $12,700. It also exchanged transportation equipment for a 15 percent interest in a partnership. The original ngs was $40,000, and accumulated MACRS depreciation was $110,000, and accumulated MACRS S depreciation through date of exchange was $38,900 . MACRS depreciation for assets placed in service in prior years (including the office furnishings and transportation equipment disposed of this year) is $187,600. The only asset acquired this year was new seven-year recovery period and was placed in service on February 11. Assume that Croyden does not elect Section 179 or bonus depreciation with respect to this acquisition Croyden's prior- year tax returns show no nonrecaptured Section 1231 losses and a $7,400 capital loss carryforward equipment costing $275,000. The equipment has a Solely on the basis of these facts, compute Croyden's taxable income. (Round your intermediate computations to the nearest whole doller amount)
