Please treat the following case as your California clients asking for tax advice, cite the case number and subpart you are using to answer.

ToysRUs Corporation is a CASH method client engaged in the toy marketing business. The CFO wishes to determine the corporation's E&P before deciding on the amount of distributions to shareholders. It has the following receipts and expenses for 2020. Compute its taxable income first, then compute its earnings and profits pursuant to IRC Sec. 312. Use corporate rate of 21% and ignore the state taxes as applicable. Please show all calculations. Revenue Gross receipts from marketing income $100,000 Dividend Income from a 30% owned corporation $10,000 Interest on municipal bonds of California Realized but unrecognized gain from like kind 1031 exchange $2,000 $5,000 deoares when Total Revenue $117,000 Expenses Wages & other ordinary and necessary expenses con $40,000 Late payment penalty to the IRS MACRS depreciation on 5-year life asset with a cost basis of $5,000 $500 $1,500 Capital loss from sale of capital asset $3,000 Federal income tax paid in 2020 for the 2019 tax year $2,000 Total Expenses $47,000 ToysRUs Corporation is a CASH method client engaged in the toy marketing business. The CFO wishes to determine the corporation's E&P before deciding on the amount of distributions to shareholders. It has the following receipts and expenses for 2020. Compute its taxable income first, then compute its earnings and profits pursuant to IRC Sec. 312. Use corporate rate of 21% and ignore the state taxes as applicable. Please show all calculations. Revenue Gross receipts from marketing income $100,000 Dividend Income from a 30% owned corporation $10,000 Interest on municipal bonds of California Realized but unrecognized gain from like kind 1031 exchange $2,000 $5,000 deoares when Total Revenue $117,000 Expenses Wages & other ordinary and necessary expenses con $40,000 Late payment penalty to the IRS MACRS depreciation on 5-year life asset with a cost basis of $5,000 $500 $1,500 Capital loss from sale of capital asset $3,000 Federal income tax paid in 2020 for the 2019 tax year $2,000 Total Expenses $47,000