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Munster Coffin Company was formed on January 1, 2019 by Herman, Lillie, and Vlad Munster. It builds coffins. Munster Coffin Company uses a calendar year and the accrual basis. It uses straight-line depreciation for tax and book purposes and FIFO and lower-of-cost-or-market for inventory purposes.

Each is a full-time employee of the firm and each is paid $150,000.

During 2021, Munster Coffin Co. made estimated tax payments of $200,000 each quarter.

In 2021, Munster Coffin had charitable contributions of $405,000 (not in cash and assume they can take the full value based on income) and a charitable contribution carryover of 7,000.

To encourage Munster Coffin, Inc. to build an additional plant, Washington ,GA gifts 20 acres of land with a value of $150,000 and a basis of $30,000 to Munster Coffin.

Financial information:

Balance Sheet

12/31/20 12/31/21

Assets

Cash 200,000 275,000

Accounts receivable 25,000 27,000

Inventories 700,000 800,000

Corporate bonds 160,000 170,000

State bonds 100,000 126,000

Stock (23% owned domestic corp.) 150,000 172,000

Prepaid federal income tax 0 5,200

Property, plant, and equipment 120,000 120,000

Accumulated depreciation 24,000 36,000

Land 50,000 ?????

Other assets 8,000 6,500

Total Assets 1,489,000 ?????

Liabilities and Owner's Equity

Accounts payable 411,000 534,000

Other current liabilities 112,000 112,000

Mortgages 45,000 42,500

Bonds payable 5,000 5,000

Notes payable 200,000 199,000

Capital stock 175,000 175,000

Retained Earnings 541,000 ?????

Total Liabilities and Owner's Equity 1,489,000 ????

Income Statement

Income

Sales 3,000,100

Sales returns and allowances 10,000

Net Sales 2,990,000

Cost of Goods Sold 1,850,000

Gross profit 1,140,100

Land (Gift from City of Washington) ????

Interest income

Corporate bonds 10,000

State Bonds 8,000

Dividend income 17,500

Total Income ????

Expenses

Salariesofficers 450,000

Salaries and wages -others 250,000

Repairs and maintenance 15,000

Taxes (state, local, payroll) 215,000

Interest expense

Loans to acquire state bonds 3,000

Other 8,500

Advertising 20,000

Charitable contribution 405,000

Depreciation 12,000

Employee benefits program 53,000

Total expenses 1,431,500

Net income before taxes?

What is the income recognized by Munster from the gift of the land?

What is their charitable contribution deduction?

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