McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 38

Boilermaker, Inc. reported taxable income of $500,000 in 2011 and paid federal income taxes of $170,000. Not included in the company's computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000. Boilermaker deducted depreciation of $100,000 on its tax return. Under the alternative (E P) depreciation method, the deduction would have been $60,000. Compute the company's current E P for 2011.