[The following information applies to the questions displayed below) XYZ is a calendar-year corporation that began business on January 1, 2020. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6 Book Income $ 40,000,000 (27,880,089) $ 13,000,000 300,0001 20,0002 (4,000) 3,0003 50,000 $ 13,369,000 XYZ corp. Income statement For current year Revenue from sales Cost of Goods Sold Gross profit Other income: Income from Investment in corporate stock Interest income Capital gains (losses) Gain or loss from disposition of fixed assets Miscellaneous Income Gross Income Expenses: Compensation Stock option compensation Advertising Repairs and Maintenance Rent Bad Debt expense Depreciation Warranty expenses Charitable donations Meals Goodwill impairment Organizational expenditures other expenses Total expenses Tacone before taxes Provision for income taxes Het Income after taxes (7,500,000,4 (200,000 (1,350,000) (75.000) (22,000) (41,000) (1,400,000)? (70,000, (500,000 (18,000) (30.000, 10 (44,000, 11 (140,000 12 11,390,000) (400,000; 13 $1,579,00 1. XYZ owns 30 percent of the outstanding Hobble Corp. (HC) stock. Hobble Corp. reported $1,000,000 of income for the year XYZ accounted for its investment in HC under the equity method, and it recorded its pro rata share of HC's earnings for the year HC also distributed a $200,000 dividend to XYZ 2. Of the $20.000 interest income, $5,000 was from a City of Seattle bond, $7,000 was from a Tacoma City bond, $6,000 was from a fully taxable corporate bond, and the remaining $2,000 was from a money market account 3. This gain is from equipment that XYZ purchased in February and sold in December (t.e., It does not qualify as $1231 gain) 4. This includes total officer compensation of $2.500.000 (no one officer received more than $1,000,000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (recipients are officers) 6.XYZ actually wrote off $27000 of its accounts receivable as uncollectible 7 Tax depreciation was $1,900,000 8. In the current year, XYZ did not make any actual payments on warranties it provided to customers. 9. XYZ made $500,000 of cash contributions to qualified charities during the year 10. On July 1 of this year XYZ acquired the assets of another business in the process, it acquired $300,000 of goodwill. At the end of the year, XYZ wrote off $30,000 of the goodwill as impaired. 11.XYZ expensed all of its organizational expenditures for book purposes XYZ expensed the maximum amount of organizational expenditures allowed for tax purposes 12. The other expenses do not contain any items with book-tax differences 13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes Estimated tax information XYZ made four equal estimated tax payments totaling $360,000 (590,000 per quarter). For purposes of estimated tax liabilities, assume XYZ was in existence in 2019 and that in 2019 it reported a tax liability of $500,000. During 2020, XYZ determined its taxable income at the end of each of the four quarters as follows: Quarter-end First Second Third Cumulative taxable income Closs) 5 400,000 $1,100,000 $1,400,000 Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. (Do not round Intermediate calculations. Round your answers to the nearest dollar amount.) Installment (1) Required cumulative (2) Estimated tax payment (per payment under quarter) under prior annualized method year tax method (3) Required payment based on current year tax Hability (4) Required cumulative payment (5) Actual payments Underpayment penalty $ $ 1st quarter 2nd quarter 3rd quarter 4th quarter 125,000 250,000 375,000 500,000 $ $ $ 90.000 No 180,000 INO 270,000 Yes 360,000 Yes 5 $ $ EXHIBIT 16 Stecknad Dividendes Reched Det er Reg Corporatie's Ownership is Dributing parte's Stock Dead Red Dette Perret Les 20 per 40 64 100 The woman who wild west. The one winner