Sparrow Corporation (a calendar year, accrual basis taxpayer) had the following transactions in 2012, its second year of operations. Taxable income Federal income tax liability Tax-exempt interest income Current year disallowed charitable contributions Premiums paid on key employee life insurance Proceeds from key employee life insurance policy Capital loss carryover deducted this year MACRS deduction (for TI) Straight-line depreciation using ADS lives (for E&P) Section 179 expense elected during 2011 DRD Increase in LIFO recapture (also called LIFO reserve) $ 330,000 112,000 5,000 1,500 3,500 130,000 Adj 13,000 26,000 16,000 100,000 17,500 10,000

Calculate Current Earnings and Profit

Sparrow Corporation (a calendar year, accrual basis taxpayer) had the following transactions in 2012 its second year of operations