Heron Corporation, a calendar year, accrual basis taxpayer,…
Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for this year and asks you to compute taxable income: Net income per books (after-tax) $257,950 Federal income tax liability 41,750 Interest income from tax-exempt bonds 15,000 Interest paid on loan incurred to purchase tax-exempt bonds 1,500 Life insurance proceeds received as a result of death of Heron’s president 150,000 Premiums paid on policy on life of Heron’s president 7,800 Excess of capital losses over capital gains 6,000 Retained earnings at beginning of year 375,000 Cash dividends paid 90,000