7. | Question : | (TCO 3) Walnut Corporation, a calendar-year taxpayer, has taxable income of $110,000 for the year. In reviewing Walnut’s financial records, you discover the following occurred this year. Federal income taxes paid: $25,000 Net operating loss carry forward deducted currently: $25,000 Gain recognized this year on an installment sale from a prior year: $12,000 Depreciation deducted on tax return (ADS depreciation would have been $8,000): $15,000 Interest income from Wisconsin state bonds: $37,000 Walnut Corporation’s current E & P is |