Problem 06-05 (Algo) [LO 6-1, 6-4]

FruAgro Company has average annual gross receipts of $40 million annually. This year, FruAgro earned $3 million of business interest income, incurred $9 million of business interest expense and has adjusted taxable income of $11 million.

Required:

Compute FruAgros current deduction for business interest and the amount of any business interest carryforward.

Note: Enter your answers in dollars not in millions of dollars.