McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 18

Chandler Corporation reported pre-tax book income of $2,000,000.Tax depreciation exceeded book depreciation by $500,000.During the year the Company capitalized $250,000 into ending inventory under §263A.Capitalized inventory costs of $150,000 in beginning inventory were deducted as part of cost of goods sold on the tax return.Assuming a tax rate of 34%, compute the company's taxes payable or refundable.