Packard Corporation reported taxable income of $1,000,000 in 20X3 and paid federal income taxes of $340,000. Included in the taxable income computation was a dividends received deduction of $5,000, a net capital loss carryover from 20X2 of $10,000 utilized in 20X3, and gain of $50,000 recognized on the collection of cash from an installment sale that took place in 20X1. The corporation's current E&P for 20X3 would be:

$695,000

Explanation:

The corporation's current Earning & Profit for 20X3 would be:

Particulars                               Amount

Taxable income                     $1,000,000

Less: Federal tax                   $340,000  

Balance                                  $660,000

Add: Gain                               $50,000

Less: Net capital loss            $10,000

Less: Deduction                     $5,000    

Current Earnings and Profit $695,000

a ab

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.