The Guava Corporation Has Book Net Income of $90,000 for 2013.Included

question 74

Essay

The Guava Corporation has book net income of $90,000 for 2013.Included in this figure are the following items which are reported on the corporation's Schedule M-1,Reconciliation of Income Loss)per Books with Income per Return. $\begin{array}{ll}\text { 1. Federal income tax expense }&\$22,000\\\text { 2. Depreciation deducted on books, not deductible for tax purposes }&\$5,000\\\text { 3. Deduction for } 50 \text { percent of meal s and entertainment expense not }\\\text { allowed for tax purposes }&\$3,000\\\text { 4. Deduction for payroll tax penalties not allowed for tax purposes }&\$2,000\\\text { 5. Tax exempt interest income included in book income but not in tax }\\\text { return income }&\$10,000\end{array}$
Based on the above information,calculate the Guava Corporation's taxable income for the year.Show your calculations.

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Definitions:

Illiquid Assets

Assets that cannot be easily sold or converted into cash without a significant loss in value.

Financial Institutions

Organizations that provide financial services, such as banks, insurance companies, and investment funds, playing a critical role in the economy.

Legal Reserve Requirements

Guidelines enforced by central banks on the minimal reserves that banks should maintain in relation to their deposits.

Destroyed Money

The process of physically eliminating money from circulation, typically by central banks, to manage a currency's supply.