In each of the following independent situations, indicate the effect on taxable income and E & P, stating the amount of any increase (or decrease) in each as a result of the transaction.

Assume that E & P has already been increased by taxable income.

Enter a decrease as a negative number by using the minus sign. If there is no effect, enter "0"

\begin{tabular}{|c|c|c|c|c|c|c|c|} \hline & Transaction & Ine & \begin{tabular}{l} able Income \\ ise (Decrea \end{tabular} & \begin{tabular}{l} is \\ ase) \end{tabular} & Iner & \begin{tabular}{l} E.R \\ se (Decrease) \end{tabular} & \\ \hline & \begin{tabular}{l} a. Reallzed gain of $80,000 on involuntary conversion of building ($10,000 \\ of gain is recognized). \end{tabular} & $ & 10,000 & & s & 0 & \\ \hline & \begin{tabular}{l} b. Mining exploration costs incurred on May 1 of current year; $24,000 is \\ deductible from current-year taxable income. \end{tabular} & $ & 24,000 & & s & 24,000 & x \\ \hline & \begin{tabular}{l} c. Sale of equipment to unrelated third party for $240,000; basis is \\ $120,000 (no election out of installment method; no payments are \\ received in current year). \end{tabular} & 5 & 0 & & 5 & 120,000 & \\ \hline & \begin{tabular}{l} d. Dividends of $20,000 received from 5% owned corporation, together with \\ dividends received deduction (assume that the taxable income limit does \\ not apply). \end{tabular} & 5 & 20,000 & x & 5 & 20,000 & x \\ \hline & \begin{tabular}{l} e. Additional first-year (bonus) depreciation of $45,000 claimed in current \\ year. \end{tabular} & $ & 45,000 & & 5 & 45,000 & \\ \hline f. & Section 179 expense deduction of $25,000 in current year. & $ & 25,000 & & $ & 100,000 & x \\ \hline g. & Continue with the facts of (f) for the next tax year. & $2 & 0 & & $2 & 100,000 & x \\ \hline h. & \begin{tabular}{l} MACRS depreciation of $80,000. ADS depreciation would have been \\ $90,000. \end{tabular} & $ & 80,000 & & & 10,000 & \\ \hline 1. & Federal income taxes of $80,000 paid in current year. & $ & 0 & & & 80,000 & \\ \hline \end{tabular}