TGW, a calendar year corporation, reported $3,908,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation’s records reveal the following information:
• TGW’s depreciation expense per books was $448,000, and its MACRS depreciation deduction was $377,900.
• TGW capitalized $678,000 indirect expenses to manufactured inventory for book purposes and $802,000 indirect expenses to manufactured inventory for tax purposes.
• TGW’s cost of manufactured goods sold was $2,557,000 for book purposes and $2,638,000 for tax purposes.
• Four years ago, TGW capitalized $2,250,000 goodwill when it purchased a competitor’s business. This year, TGW’s auditors required the corporation to write the goodwill down to $1,500,000 and record a $750,000 goodwill impairment expense.
Compute TGW’s taxable income.

  • CreatedNovember 03, 2015
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