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 66

Boilermaker, Inc.reported taxable income of $500,000 in 2011 and paid federal income taxes of $170,000.Not included in the company's computation of taxable income is tax-exempt income of $20,000, disallowed meals and entertainment expenses of $30,000, and disallowed expenses related to the tax-exempt income of $1,000.Boilermaker deducted depreciation of $100,000 on its tax return.Under the alternative (E P) depreciation method, the deduction would have been $60,000.Compute the company's current E P for 2011.