SPA Corporation's books, which are maintained using the accrual method, show the following income and expense items for the 2011 tax year:
Gross sales and receipts $750,000
Cost of goods sold 100,000
Taxable interest income 20,000
Dividend Income (SPA owns 10% of the company) 40,000
Office rent expense 50,000
Salaries and wages expense 300,000
Charitable contributions 30,000
Miscellaneous business expenses 75,000
New furniture purchased 20,000
Depreciation on new furniture 3,000
a. Determine the corporation's taxable income for the 2011 tax year. (The company does not qualify to take the domestic production activities deduction.)
b. Determine the corporation's charitable contribution carryover (if any).