St. George Inc. reported $711,800 net income before tax on this year’s financial statement prepared in accordance with GAAP. The corporation’s records reveal the following information:
• Four years ago, St. George realized a $283,400 gain on sale of investment property and elected the installment sale method to report the sale for tax purposes. Its gross profit percentage is 50.12, and it collected $62,000 principal and $14,680 interest on the installment note this year.
• Five years ago, St. George purchased investment property for $465,000 cash from an LLC. Because St. George and the LLC were related parties, the LLC’s $12,700 realized loss on sale was disallowed for tax purposes. This year, St. George sold the property to an unrelated purchaser for $500,000.
• A flood destroyed several antique carpets that decorated the floors of corporate headquarters. Unfortunately, St. George’s property insurance does not cover dam-age caused by rising water, so the loss was uninsured. The carpets’ adjusted book basis was $36,000, and their adjusted tax basis was $28,400. Compute St. George’s taxable income.
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St. George Inc. reported $711,800 net income before tax on this year’s financial statement prepared in accordance with GAAP. The corporation’s records reveal the following information: • Four years ago, St. George realized a $283,400 gain on sale of inves
Cramer Corporation, a calendar year, accrual basis corporation, reported $1.90 million of net income after tax on its 2020 financial statements prepared in accordance with GAAP. The corporation’s books and records reveal the following information: Cramer's federal income tax expense per books was $218,000.Cramer's book income included $28,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $13,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.Cramer recognized...