Croyden is a calendar year, accrual basis corporation. Mr. and Mrs. Croyden (cash basis taxpayers) are the sole corporate shareholders. Mr. Croyden is president and Mrs. Croyden is vice president of the corporation. Croyden's financial records, prepared in accordance with GAAP, show the following information for the year.

Croyden's records reveal the following facts. ?

1. Under the UNICAP rules, Croyden had to capitalize $ 142,800 of administrative wages to inventory. These wages were expensed for financial statement purposes. ?
2. Because of the UNICAP rules, Croyden's cost of goods sold for tax purposes exceeds cost of goods sold for financial statement purposes by $ 219,000. ?
3. Bad debt expense equals the addition to the corporation's allowance for bad debts. Actual write-offs of uncollectible accounts during the year totaled $ 31,200. ?
4. Administrative salaries include an accrued $ 50,000 year-end bonus to Mr. Croyden and an accrued $ 20,000 year-end bonus to Mrs. Croyden. These bonuses were paid on January 17 of the following year. ? The life insurance premiums were on key-person policies for Mr. and Mrs. Croyden. The corporation is the policy beneficiary. ?
5. Croyden disposed of two assets during the year. (These dispositions are not reflected in the financial statement information shown above.) It sold office furnishings for $ 45,000. The original cost of the furnishings was $ 40,000, and accumulated MACRS depreciation through date of sale was $ 12,700. It also exchanged transportation equipment for a 15 percent interest in a partnership. The original cost of the transportation equipment was $ 110,000, and accumulated MACRS depreciation through date of exchange was $ 38,900.
6. MACRS depreciation for assets placed in service in prior years (including the office furnishings and transportation equipment disposed of this year) is $ 187,600. The only asset acquired this year was new equipment costing $ 275,000. The equipment has a seven- year recovery period and was placed in service on February 11. ?
7. Croyden's prior year tax returns show no non-recaptured Section 1231 losses and a
8. $ 7,400 capital loss carry-forward.