Problem: Module $8$ Textbook Problem $3$

Learning Objective: $8-3$ Prepare a reconciliation of book and taxable income

EFG, a calendar year, accrual basis corporation, reported $$479,900$ net income after tax on its financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information:

EFG earned $$10,700$ on an investment in tax$-$exempt municipal bonds.

EFG's allowance for bad debts as of January $1$ was $$21,000.$ Write$-$offs for the year totaled $$4,400,$ while the addition to the allowance was $$3,700.$ The allowance as of December $31$ was $$20,300.$

On August $7,$ EFG paid a $$6,000$ fine to a municipal government for a violation of a local zoning ordinance.

EFG's depreciation expense per books was $$44,200,$ and its MACRS depreciation deduction was $$31,000.$

This is EFG's second taxable year. In its first taxable year, it recognized an $$8,800$ net capital loss. This year, it recognized a $$31,000$ long term capital gain.

In its first taxable year, EFG capitalized $$6,900$ organizational costs for tax purposes and elected to amortize the costs over $180$ months. For book purposes, it expensed the costs.

EFG's federal income tax expense per books was $$151,000.$

Required:

a$.$ Compute EFG's taxable income.