A) Good Luck Corporation, a calendar–year, accrual-basis Corporation, has $500,000 of gross receipts and $320,000 of expenses from its service business. In addition, it has $5,000 of tax-exempt interest income, $20,000 of dividends from an affiliated corporation, a $10,000 short-term capital loss, and authorized a charitable contribution of $15,000 on December 15, which it paid on March 31 of the next tax year.

Required:

What is Good Luck Corporation’s taxable income and income tax liability for the current tax year?

B) L& T Partnership has gross operating revenue of $450,000, cost of sales of $150,000, salaries to employees of $40,000, a $25,000 Section 179 expense deduction, $10,000 of other depreciation, interest income of $2,000, a $4,000 capital loss, and a $500 charitable contribution deduction.

Required

What are the partnership’s bottom line net income and its separately stated items?