WQP Company generated $1,814,700 ordinary income from the sale of inventory to its customers. It also sold three noninventory assets during the year. Compute WQP's taxable income assuming that: a. The first sale resulted in a $10,400 ordinary gain, the second sale resulted in a $23,900 capital loss, and the third sale resulted in a $44,000 capital gain. b. The first sale resulted in a $79,100 capital loss, the second sale resulted in a $35,200 ordinary loss, and the third sale resulted in a $16,000 capital gain.
What will be an ideal response?
a. WQP's taxable income is $1,845,200 ($1,814,700 income from inventory sale + $10,400 ordinary gain + $44,000 capital gain ? $23,900 capital loss [fully deductible]).
b. WQP's taxable income is $1,779,500 ($1,814,700 income from inventory sale ? $35,200 ordinary loss + $16,000 capital gain ? $16,000 capital loss [limited to capital gain]).
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