Problem 6: Determine taxable income in each of the following instances.  Assume that the corporation is a C corporation and that book income is before any income tax expense.

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1. Book income of $100,000 including capital gains of $4,000, a charitable contribution of $2,000, and travel and entertainment expenses of $6,000.

The 50% of travel and expenses are deductible. Hence, to get taxable income, they must added to book profit. On the other hand, in computing taxable income, charitable contributions and capital gains are not adjusted. Therefore, taxable income is equivalent to;