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 (27,000,000) $ 13,000,000 300, 2001 20,8002 (4,000) 3,0003 50,000 $ 13,369,000 XYZ corp. Income statenent For current year Revenue from sales Cost of Goods Sold Gross profit Other income: Income fron 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 Incone before taxes Provision for Income taxes Net Income after taxes (7,500,000) (200,00035 (1,350,000) (75,000 (22,000) (41,000,6 (1,400,000) (70,900) 8 (500,000) (18,000) (30,000, 10 (44,00011 (140,000:12 $(11,390,000) $ 1,979,000 (400,000) 13 $ 1.579.000 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 (.e. It does not qualify as 51231 gain) 4. This includes total officer compensation of $2,500,000 (no one omcer 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 $27,000 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 Estimated tax information XYZ made four equal estimated tax payments totaling $360,000 ($90,000 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: Cumulative taxable Quartered Income (los) First $ 400,000 Second $1,100,000 Third $1,400,000 taxes 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.) e. Determine the quarters for which XYZ is subject to underpayment of estimated tax penalties (Round "Annualization Factor" for Fourth quarter to 2 decimal places.) (3) Required cumulative (2) Estimated tax payment per payment under quarter) under prior annualized method year lax method (3) Required payment based on current year tax labaty (4) Required cumulative payment 15) Actual Dayments Underpayment penalty 1st Quarter 2nd quarter 3rd quarter 4th quarter EXHIBIT 16 6 Sockenband vidends Receh di Perta Receiving Carpet's Stork Ohip Dirt Corporati's Stad Divad Received Dedo Pratap Lanthap 505 les 20 per les peces 100 * Tales for the phone there and corporation therefore There are the pup