Airfreight Corporation has book income of $370,000.Book income includes a $25,000 gain realized on a like-kind nontaxable exchange of equipment.Based only on these items,compute Airfreight's taxable income.

Question

Quizplus · Accepted Answer

The $25,000 gain realized on a like-kind nontaxable exchange of equipment is excluded from taxable income. Therefore, taxable income is equal to book income minus the excluded gain: 
Taxable income = $370,000 - $25,000 = $345,000. Option C is the correct answer.

Airfreight Corporation Has Book Income of $370,000