Required Information Comprehensive Problem 13-83 (LO 13-1, LO 13-2, LO 13-3) (Algo) [The following information applies to the questions displayed below] XYZ is a calendar-year corporation that began business on January 1, 2024. For the year, It reported the following Information In its current-year audited income statement. Notes with Important tax Information are provided below. XYZ corporation Income statement For current year Book Income Revenue from sales $ 44, 400,090 cost of Goods Sold (29,970, 080 Gross profit $ 14, 430,090 Other income: Income from investment in corporate stock 300, egg1 Interest income 37, 6802 capital gains (losses) (4, 080) Gain or loss from disposition of fixed assets 3, Bee Miscellaneous income 50, 090 Gross Income $ 14, 816, 606 Expenses : compensation (7,544,808)4 Stock option compensation (244, 080)5 Advertising (1, 394, 080 Repairs and Maintenance (97, 080 Rent expense (44, 080 Bad Debt expense (63, 808) 6 Depreciation (1, 950, 080) Warranty expenses (114, 808) 8 charitable donations (508, 808)9 Meals (40, 408) Goodwill impairment (41, Bee) 10 Organizational expenditures (47, 800) 11 other expenses (184,800) 12 Total expenses $ (12, 262, 408 Income before taxes $ 2, 554, 200 Provision for income taxes (400, 820) 13 Net Income after taxes $ 2, 154, 200 1XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1,000,000 of Income for the year. XYZ accounted for its Investment in HC under the equity method, and it recorded its pro rata share of HC's earnings for the year. HC also distributed a $200,000 dividend to XYZ. For tax purposes, XYZ reports the actual dividendreceived as income, not the pro rata share of HC's earnings. 2Ofthe $37,600 interest income, $9,400 was from a City of Seattle bond, $11,400 was from a Tacoma City bond, $10,400 was from a fully taxable corporate bond, and the remaining $6,400 was from a money market account. 3This gain is from equipment that XY Z purchased in February and sold in December (i.e, it does not gualify as 1231 gain). 4Thi$ includes total officer compensation of $2,500,000 (no one officer received more than $1,000,000 compensation). SThis amount is the portion of incentive stock option compensation that was expensed during the year [recipients are officers). SXYZ actually wrote off $38,000 of its accounts receivable as uncollectible. ?Tax depreciation was $2 450,000. 8in the current year, XYZ did not make any actual payments on warranties it provided to customers. QXYZ made $500,000 of cash contributions to charities during the year 100 July 1 of this year, XYZ acquired the assets of another business. In the process, it acquired $366,000 of goodwill. At the end of the year, XYZ wrote off 41,000 of the goodwill as impaired. vz expensed all of its organizational expenditures for book purposes. XYZ expensed the maximum amount of organizational expenditures allowed for tax purposes. 124 13This is an estimated tax provision (federal tax expense) for the year. Assume that XY Z is not subject to state income taxes. [he other expenses do not contain any items with booktax differences. Estimated tax information: XZ made four equal estimated 1ax payments totaling $480,000 ($120,000 per quarner). For purposes of estimated tax liabilities, assume XYZ was in existence in 2023 and that in 2023 it reported a tax liability of $668,000. During 2024, XYZ determined its taxable income at the end of each of the first three guarters as follows: Cumulative taxable Quarter-end income (loss) First % 518,088 Second $ 1,310,208 Third $ 1,870,000 Finally, assume that XY Z is not a large corporation for purposes of estimated tax calculations. Note: Do not round intermediate calculations. Round your answers to the nearest dollar amount. Comprehensive Problem 13-83 Part a (Algo) a. Compute XYZ's taxable income. Use Exhibit 13-6. D Answer is complete but not entirely correct. [ Tebeincone s 2514400 EXHIBIT 13-6 Net Operating Loss Carryback and Carryover Summary Tax Year NOL Originated Carrybacks Carryovers Back two years.* Can offset 100 percent of taxable income before |Forward 20 years. Can offset 100 percent of taxable income Beginning before 2018 the NOL deduction in carryback years. before the NOL deduction. Carried forward indefinitely. Can offset up to 80 percent of Beginning after 2017%* Not allowed. taxable income before the NOL deduction in tax years beginning before 2018 *4 corporation could elect to forgo the NOL carryback and simply carry the NOL forward to future vears. Also, if a corporation carries back a NOL, it must carry it back to the earliest year first (i.e., two years prior or five vears prior, depending on the year the NOL was originated). \"*Special rules applied for NOLs incurred after 2017 and before 2021 that no longer apply and are beyond the scope of the text