Question

LNS corporation reports book revenue of $2,910,000. Included in the $2,910,000 is $16,500 of tax-exempt interest income. LNS reports $2,837,500 in ordinary and necessary business expenses. What is LNS Corporation’s taxable income for the year?

Answer 1

The NS Corporation’s taxable income for the year is $56,000

Step-by-step explanation:

Taxable income: The taxable income is that income which is to be submitted to the government. It is computed by subtracting the business expense and tax-exempt interest income from the book revenue/sales.

The computation of the taxable income is shown below:

= Book revenue - Ordinary and necessary business expense - tax-exempt interest income

= $2,910,000 - $2,837,500 - $16,500

= $56,000