Reference no: EM131294962
Webster, Inc. has the following items of items of income and expense for 2016, it first year of operations. Webster began operations on April 1 and uses a calendar year end.
Gross receipts from sales $ 1,391,222
Charitable contributions 15,000
Employment taxes 10,250
Interest expense 30,000
Organizational costs 52,600
Office rent expense 31,000
Real estate taxes 15,600
Utilities expense 11,300
Wage expense 9,3540
In addition to these items, Webster purchased machinery and equipment costing $1,430,000 and furniture costing $112,000 on April 9, 2016, and a ware house costing $190,000 on May 2, 2016.
Webster wants to minimize its 2016 income tax liability, which means electing section 179 expense for the maximum the tax law allows, as well as taking the 50-percent bonus depreciation. Compute Webster's 2016 taxable income and income tax liability.
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