Prepare a calculation of Wildcats current earnings and profits (E&P).

$ 8,355,125 (25.795) $ 8,329,330 (5,360,152) $ 2,969,178 Wildcat Corporation Income Statement for Year Ending December 31, 2020 Sales revenues Less: Sales allowances & returns Net revenues Less: Cost of goods sold Gross margin Less: Operating expenses Advertising $ 46,921 Bad debts 179,629 Charitable contributions 35,876 Depreciation 52.703 Insurance 129,925 Interest 15.492 Miscellaneous 23,561 Rent 222,563 Repairs & maintenance 63,849 Salaries & wages 1,400,482 Taxes 198,726 Utilities 132.136 Net operating income Dividend' & interest income Income tax payments Net income (2.501.863) $ 467,315 1.543 (78.000 390.858 S 167,258 458,684 1.152,967 62,231 423.333 5.762 $ 2.270.235 Wildcat Corporation Balance Sheet for December 31, 2020 Cash Accounts receivable (net of $31,838 allowance for doubtful accounts) Inventory Investments Depreciable property (net of 52,703 accumulated depreciation) Other assets Total assets Accounts payable Other current liabilities Note payable Total liabilities Common stock Retained earnings" Total equities Total liabilities & equities $ 313,286 2,950 399.141 S 715,377 $ 1,200,000 354,858 $ 1,554,858 S 2.270.235 See the notes for the income statement and balance sheet on the next page. Notes for income statement and balance sheet: Wildcat wrote off $147,791 of its accounts receivable as uncollectible. The contributions were all in cash. Book depreciation is determined using the straight-line method, a zero estimated residual value, and a full year of depreciation for the year of acquisition. Wildcat purchases and places into service the assets on January 1, 2020: Estimated MACRS Original cost useful life recovery period Class life $163,240 12 years 7 years 10 years $312,796 8 years 5 years 9 years Wildcat does not use Sec. 179 or bonus depreciation. See Chapter 1:10 for details regarding MACRS depreciation. See the current E&P exercise we did in class for an example of E&P depreciation. This is comprised of S7,138 for life insurance on Wildcat's president (with Wildcat as the beneficiary) and $122,787 for casualty and liability insurance. The life insurance does not have a cash surrender value. The interest expense is on a loan whose proceeds Wildcat used to purchase depreciable assets. "This is comprised of $10,340 of organizational expenditures and $13,221 of fully-deductible other expenses. Wildcat wants to deduct for 2020 the maximum amount allowed for these expenses. $$200,897 of this is compensation of Wildcat's officers. "This is comprised of payroll and property taxes. Wildcat received S478 of dividends from domestic corporations in which it owns less than 1% of the stock. Wildcat owned the stock for more than 45 days before the stock became ex-dividend with respect to the dividends. Wildcat received $734 of interest on investments in corporate bonds and $331 of interest on investments in municipal bonds. * This is comprised of four quarterly estimated tax payments of $19,500 each. Wildcat debited its Income Tax Expense account and credited its Cash account when it made the payments. Assume Wildcat is not subject to any state, local, or foreign income taxes. This is comprised of $25,284 of stocks, $15,455 of corporate bonds, and $21,492 of municipal bonds. "$37,202 of the note payable is a current liability, and $361,939 is a long-term liability. "The retained earnings are unappropriated. Wildcat paid $36,000 of cash dividends to its shareholders during the year. Hint for items a, d, and f See the highlights of the material for Tuesday, February 9 and Tuesday, February 16. $ 8,355,125 (25.795) $ 8,329,330 (5,360,152) $ 2,969,178 Wildcat Corporation Income Statement for Year Ending December 31, 2020 Sales revenues Less: Sales allowances & returns Net revenues Less: Cost of goods sold Gross margin Less: Operating expenses Advertising $ 46,921 Bad debts 179,629 Charitable contributions 35,876 Depreciation 52.703 Insurance 129,925 Interest 15.492 Miscellaneous 23,561 Rent 222,563 Repairs & maintenance 63,849 Salaries & wages 1,400,482 Taxes 198,726 Utilities 132.136 Net operating income Dividend' & interest income Income tax payments Net income (2.501.863) $ 467,315 1.543 (78.000 390.858 S 167,258 458,684 1.152,967 62,231 423.333 5.762 $ 2.270.235 Wildcat Corporation Balance Sheet for December 31, 2020 Cash Accounts receivable (net of $31,838 allowance for doubtful accounts) Inventory Investments Depreciable property (net of 52,703 accumulated depreciation) Other assets Total assets Accounts payable Other current liabilities Note payable Total liabilities Common stock Retained earnings" Total equities Total liabilities & equities $ 313,286 2,950 399.141 S 715,377 $ 1,200,000 354,858 $ 1,554,858 S 2.270.235 See the notes for the income statement and balance sheet on the next page. $ 8,355,125 (25.795) $ 8,329,330 (5,360,152) $ 2,969,178 Wildcat Corporation Income Statement for Year Ending December 31, 2020 Sales revenues Less: Sales allowances & returns Net revenues Less: Cost of goods sold Gross margin Less: Operating expenses Advertising $ 46,921 Bad debts 179,629 Charitable contributions 35,876 Depreciation 52.703 Insurance 129,925 Interest 15.492 Miscellaneous 23,561 Rent 222,563 Repairs & maintenance 63,849 Salaries & wages 1,400,482 Taxes 198,726 Utilities 132.136 Net operating income Dividend' & interest income Income tax payments Net income (2.501.863) $ 467,315 1.543 (78.000 390.858 S 167,258 458,684 1.152,967 62,231 423.333 5.762 $ 2.270.235 Wildcat Corporation Balance Sheet for December 31, 2020 Cash Accounts receivable (net of $31,838 allowance for doubtful accounts) Inventory Investments Depreciable property (net of 52,703 accumulated depreciation) Other assets Total assets Accounts payable Other current liabilities Note payable Total liabilities Common stock Retained earnings" Total equities Total liabilities & equities $ 313,286 2,950 399.141 S 715,377 $ 1,200,000 354,858 $ 1,554,858 S 2.270.235 See the notes for the income statement and balance sheet on the next page. Notes for income statement and balance sheet: Wildcat wrote off $147,791 of its accounts receivable as uncollectible. The contributions were all in cash. Book depreciation is determined using the straight-line method, a zero estimated residual value, and a full year of depreciation for the year of acquisition. Wildcat purchases and places into service the assets on January 1, 2020: Estimated MACRS Original cost useful life recovery period Class life $163,240 12 years 7 years 10 years $312,796 8 years 5 years 9 years Wildcat does not use Sec. 179 or bonus depreciation. See Chapter 1:10 for details regarding MACRS depreciation. See the current E&P exercise we did in class for an example of E&P depreciation. This is comprised of S7,138 for life insurance on Wildcat's president (with Wildcat as the beneficiary) and $122,787 for casualty and liability insurance. The life insurance does not have a cash surrender value. The interest expense is on a loan whose proceeds Wildcat used to purchase depreciable assets. "This is comprised of $10,340 of organizational expenditures and $13,221 of fully-deductible other expenses. Wildcat wants to deduct for 2020 the maximum amount allowed for these expenses. $$200,897 of this is compensation of Wildcat's officers. "This is comprised of payroll and property taxes. Wildcat received S478 of dividends from domestic corporations in which it owns less than 1% of the stock. Wildcat owned the stock for more than 45 days before the stock became ex-dividend with respect to the dividends. Wildcat received $734 of interest on investments in corporate bonds and $331 of interest on investments in municipal bonds. * This is comprised of four quarterly estimated tax payments of $19,500 each. Wildcat debited its Income Tax Expense account and credited its Cash account when it made the payments. Assume Wildcat is not subject to any state, local, or foreign income taxes. This is comprised of $25,284 of stocks, $15,455 of corporate bonds, and $21,492 of municipal bonds. "$37,202 of the note payable is a current liability, and $361,939 is a long-term liability. "The retained earnings are unappropriated. Wildcat paid $36,000 of cash dividends to its shareholders during the year. Hint for items a, d, and f See the highlights of the material for Tuesday, February 9 and Tuesday, February 16. $ 8,355,125 (25.795) $ 8,329,330 (5,360,152) $ 2,969,178 Wildcat Corporation Income Statement for Year Ending December 31, 2020 Sales revenues Less: Sales allowances & returns Net revenues Less: Cost of goods sold Gross margin Less: Operating expenses Advertising $ 46,921 Bad debts 179,629 Charitable contributions 35,876 Depreciation 52.703 Insurance 129,925 Interest 15.492 Miscellaneous 23,561 Rent 222,563 Repairs & maintenance 63,849 Salaries & wages 1,400,482 Taxes 198,726 Utilities 132.136 Net operating income Dividend' & interest income Income tax payments Net income (2.501.863) $ 467,315 1.543 (78.000 390.858 S 167,258 458,684 1.152,967 62,231 423.333 5.762 $ 2.270.235 Wildcat Corporation Balance Sheet for December 31, 2020 Cash Accounts receivable (net of $31,838 allowance for doubtful accounts) Inventory Investments Depreciable property (net of 52,703 accumulated depreciation) Other assets Total assets Accounts payable Other current liabilities Note payable Total liabilities Common stock Retained earnings" Total equities Total liabilities & equities $ 313,286 2,950 399.141 S 715,377 $ 1,200,000 354,858 $ 1,554,858 S 2.270.235 See the notes for the income statement and balance sheet on the next page