1. Compute Bug’s Federal Income Tax for the year ended December 31, 2019. Please show your calculation.
2. Computer Bugs’s Business Interest Deduction. Please show your calculation.
3. Computer Bugs’ Earnings and Profits for the year ended December 31, 2019. Please show your calculation.

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Bug Corporation ("Bug") is manufacturer of heavy equipment used throughout the world. It is a widely held C Corporation. For the year ended December 31, 2019, the results of operations are as follows: Sales and Revenues Sales of Machinery: Revenue for Financial Operations 50,755,000,000(1)(2) 3.045,000,000 53,800,000,000 $ Total Revenues Operating Costs Cost of Goods Sold 36,630,000,000(3)(4) 5,162,000,000 (5)(6)(7)(8)(9)(10) 1,693,000,000 754,000,000 1,271.000,000 45,510,000,000 Sales, General and Administrative Research and Development Interest Expense on Financial Products Other Operating Expenses Total Operating Costs Operating Profit 8,290,000,000 Interest Expense excluding Financial Products Other Income (expense) 421,000,000(11) (57,000,000) (12)(13) Profit before Taxes 7,812,000,000 1,746,000,000 (14) 6,066,000,000 Provision for Income Tax Expense Net Income of consolidated companies Equity in affiliated nonconsolidated companies 28,000,000(15) Profit from noncontrolling interests 1.000,000(16) Net Income 6,095,000,000 Bug Corporation ("Bug") is manufacturer of heavy equipment used throughout the world. It is a widely held C Corporation. For the year ended December 31, 2019, the results of operations are as follows: Sales and Revenues Sales of Machinery: Revenue for Financial Operations 50,755,000,000(1)(2) 3.045,000,000 53,800,000,000 $ Total Revenues Operating Costs Cost of Goods Sold 36,630,000,000(3)(4) 5,162,000,000 (5)(6)(7)(8)(9)(10) 1,693,000,000 754,000,000 1,271.000,000 45,510,000,000 Sales, General and Administrative Research and Development Interest Expense on Financial Products Other Operating Expenses Total Operating Costs Operating Profit 8,290,000,000 Interest Expense excluding Financial Products Other Income (expense) 421,000,000(11) (57,000,000) (12)(13) Profit before Taxes 7,812,000,000 1,746,000,000 (14) 6,066,000,000 Provision for Income Tax Expense Net Income of consolidated companies Equity in affiliated nonconsolidated companies 28,000,000(15) Profit from noncontrolling interests 1.000,000(16) Net Income 6,095,000,000

Answer rating: 100% (QA)

Federal Income Tax Total income 6066000000 Less Deductions Interest expense 421000000 Business interest expense 57000000 Total deductions 478000000 Taxable income 5588000000 Income tax 1746000000 Earn... View the full answer