Compute the taxpayer’s [a] book income, [b] taxable income, and [c] book/tax differences.

Acme, Inc. is an accrual-basis, calendar-year wholesaler.

• Acme was incorporated on January 4, 2018.
• Acme’s employer identification number is 31-1584392.
• Acme’s main office is located at 51515 Sycamore Street, DeKalb, IL 60115.
• Acme has total assets as of December 31, 2019, of $3,670,900.
• Acme’s receipts for book purposes include:
  • Sales totaled $2,998,000 for the year. Returns and allowances of $82,000 were subsequently granted to customers who received product that was damaged.
  • $20,700 of interest income was received during the year. Of this total, $5,800 was earned on City of DeKalb bonds.
  • $32,000 of prepaid rent was received in late December 2019 from a company that will lease excess space in its largest warehouse from February 1 through October 31, 2020.

Acme’s expenses for book purposes are as follows:

• Cost of Goods Sold                                                                            $1,132,700
• Salaries (including Officers’ Compensation of $180,000)             690,000
• Federal income tax                                                                             167,800
• Depreciation                                                                                        118,400
• State & Local Taxes                                                                             43,500
• Interest Expense                                                                                  7,000
• Repairs                                                                                                  12,000
• Rent                                                                                                       37,200
• Advertising                                                                                           25,000
• Bad debts                                                                                             30,800
• Property/Casualty Insurance Premiums                                        12,000
• Business Meals                                                                                   13,400
• Depreciation for tax purposes is $197,700.
• Acme wrote off $38,400 of accounts receivable as uncollectible this year.
• During its first tax year, Acme generated a $67,000 net operating loss.
• Acme made the following estimated income tax payments to the IRS for 2019:
  • Overpayment in 2018, credited to 2019                          $43,000
  • 2^nd quarter                                                                             35,000
  • 3^rd quarter                                                                              35,000
  • 4^th quarter                                                                              35,000
• Acme does not qualify for any other tax credits in 2019.

Any overpayment of 2019 tax should be credited to its 2020 estimate.