Lawrence Corporation Reports the Following Results During the Current Year

question 54

Essay

Lawrence Corporation reports the following results during the current year: $\begin{array}{lr}\text { Taxable income } & \$ 500,000 \\\text { Federal income taxes } & 105,000 \\\text { Dividends paid: June } 5 & 50,000 \\\text { Accumulated E\&P balance: January 1 } & 800,000\end{array}$ No dividends were paid in the throwback period. A long- term capital gain of $50,000 is included in taxable inco The statutory accumulated earnings tax exemption has been used up in prior years. An additional earnings accumulation of $60,000 for the current year can be justified as meeting the reasonable needs of the business.
What is Lawrence Corporation's accumulated earnings tax liability?

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