Problem $5-28($LO$.1,2)$

In each of the following independent situations, indicate the effect on taxable income and E $\backslash$& P$,$ stating the amount of any increase $($or decrease$)$ in each as a result of the transaction.

Assume that E $\backslash$& P has already been increased by taxable income.

Enter a decrease as a negative number by using the minus sign. If there is no effect, enter $"0".$

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The Code does not explicitly define earnings and profits. Instead, a series of adjustments to taxable income are identified to provide a measure of the corporation's economic income.