Loon, Incorporated reported taxable income of $650,000 in 20X3 and paid federal income taxes of $207,000. Not included in the company's computation of taxable income is tax-exempt interest of $35,000, disallowed meals and entertainment expenses of $17,500, and disallowed expenses related to the tax-exempt income of $4,500. Loon deducted depreciation of $225,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $85,000. Compute the company's current E&P for 20X3.

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The Answer of Loon, Incorporated reported taxable income of $650,000 in 20X3 and paid federal income taxes of $207,000. Not included in the company's computation of taxable income is tax-exempt interest of $35,000, disallowed meals and entertainment expenses of $17,500, and disallowed expenses related to the tax-exempt income of $4,500. Loon deducted depreciation of $225,000 on its tax return. Under the alternative (E&P) depreciation method, the deduction would have been $85,000. Compute the company's current E&P for 20X3.

Loon, Incorporated Reported Taxable Income of $650,000 in 20X3 and Paid