Question

Packard Corporation reported taxable income of $1,000,000 in 20X3 and paid federal income taxes of $340,000. Included in the taxable income computation was a dividends received deduction of $5,000, a net capital loss carryover from 20X2 of $10,000 utilized in 20X3, and gain of $50,000 recognized on the collection of cash from an installment sale that took place in 20X1. The corporation's current E&P for 20X3 would be:

Answer 1

$695,000

Step-by-step explanation:

The corporation's current Earning & Profit for 20X3 would be:

Particulars Amount

Taxable income $1,000,000

Less: Federal tax $340,000

Balance $660,000

Add: Gain $50,000

Less: Net capital loss $10,000

Less: Deduction $5,000

Current Earnings and Profit $695,000