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Western Corporation a calendar year accrual basis corporation, reported $500,000 of net income after tax on its financial statements prepared in accordance with GAAP The corporation’s books and

Western Corporation, a calendar year, accrual basis corporation, reported $500,000 of net income after tax on its financial statements prepared in accordance with GAAP. The corporation’s books and records reveal the following information:

• Western’s book income included $15,000 of dividends, received from a domestic corporation in which Western owns less than 1 percent of the outstanding stock.

• Western’s depreciation expense per books was $55,000, and its MACRS depreciation was $70,000.

• Western earned $5,000 of interest from municipal bonds and $6,000 of interest from corporate bonds.

• Western’s capital losses exceeded its capital gains by $2,000.

• Western’s federal income tax expense per books was $249,000.

a. Compute Western’s federal taxable income and regular tax liability.

Apr 01 2020 View more View Less

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