Texark Inc

Essay

Texark Inc.,a calendar year taxpayer,reported $5,210,300 net income before tax on its financial statements prepared in accordance with GAAP.The corporation's records reveal the following information.
Depreciation expense per books was $713,700,and MACRS depreciation was $662,000.
Texark exchanged old equipment (-0- tax basis; $44,200 book basis)for new equipment (FMV $50,000).Book gain was included in book income,although the exchange was nontaxable for tax purposes.
Texark received a $100,000 insurance reimbursement for the destruction of machinery with a $29,000 tax basis and a $70,000 book basis.Texark spent $110,000 to replace the machinery before year-end.
Compute Texark's taxable income.