Compute HC Inc.'s current-year taxable income given the following information relating to its 2020 activities. Alse compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. Use Exhibit 16-6, - Gross profit from inventory sales of $310,000 (no book-tax differences). - Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the corporation's earnings). -Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $300,000 (no book-ta: differences). - NOL carryover from prior year of $12,000. • Cash charitable contribution of $50,000. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. (Enter all val as positive numbers.) Schedule M-1: Reconcillation of Income (Loss) per Books With Income per Return 1. Net income (loss) per books 2. Federal income tax per books 3. Excess of capital losses over capital gains 4. Income subject to tax not recorded on books this year (itemize) 5. Expenses recorded on books this year not deducted on this return (itemize): a. Depreciation b. Charitable contributions c. Travel and entertainment 6. Total 7. Income recorded on books this yeat not included on this return (itemize): Tax-exempt interest 8. Deductions on this return not charged against book income this year (itemize): a. Depreciation b. Charitable contributions 9. Income %24 < Req 1 Req 2>
Compute HC Inc.'s current-year taxable income given the following information relating to its 2020 activities. Alse compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. Use Exhibit 16-6, - Gross profit from inventory sales of $310,000 (no book-tax differences). - Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the corporation's earnings). -Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $300,000 (no book-ta: differences). - NOL carryover from prior year of $12,000. • Cash charitable contribution of $50,000. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. (Enter all val as positive numbers.) Schedule M-1: Reconcillation of Income (Loss) per Books With Income per Return 1. Net income (loss) per books 2. Federal income tax per books 3. Excess of capital losses over capital gains 4. Income subject to tax not recorded on books this year (itemize) 5. Expenses recorded on books this year not deducted on this return (itemize): a. Depreciation b. Charitable contributions c. Travel and entertainment 6. Total 7. Income recorded on books this yeat not included on this return (itemize): Tax-exempt interest 8. Deductions on this return not charged against book income this year (itemize): a. Depreciation b. Charitable contributions 9. Income %24 < Req 1 Req 2>
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Compute HC Inc's current-year taxable income given the following information relating to its 2020 activities. Also,
compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. Use
Exhibit 16-6,
• Gross profit from inventory sales of $310,000 (no book-tax differences).
• Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the
corporation's earnings).
Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $300,000 (no book-tax
differences).
• NOL carryover from prior year of $12,000.
• Cash charitable contribution of $50,000.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. (Enter all values
as positive numbers.)
Schedule M-1: Reconcillation of Income (Loss) per Books With Income per Return
1. Net income (loss) per books
2. Federal income tax per books
3. Excess of capital losses over capital gains
4. Income subject to tax not recorded on books this year (itemize)
5. Expenses recorded on books this year not deducted on this return (itemize):
a. Depreciation
b. Charitable contributions
c. Travel and entertainment
6.
Total
7.
Income recorded on books this yeat not included on this return (itemize):
Tax-exempt interest
8.
Deductions on this return not charged against book income this year (itemize):
a. Depreciation
b. Charitable contributions
9.
Income
%24
< Req 1
Reg 2
Transcribed Image Text:Homework 6
Compute HC Inc.'s current-year taxable income given the following information relating to Its 2020 activities. Also,
compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. Use
Exhibit 16-6.
• Gross profit from Inventory sales of $310,000 (no book-tax differences).
• Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the
corporation's earnings).
• Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $300,000 (no book-tax
differences).
• NOL carryover from prior year of $12,000.
• Cash charitable contribution of $50,000. Assume HC does not elect to use the 25% of modified taxable income
limitation to determine its charitable contribution deduction.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. (Enter all values
as positive numbers.)
Schedule M-1: Reconciliation of Income (Loss) per Books With Income per Return
1. Net income (loss) per books
2. Federal income tax per books
3. Excess of capital losses over capital gains
4.
Income subject to tax not recorded on books this year (itemize)
5. Expenses recorded on books this year not deducted on this return (itemize):
a. Depreciation
b. Charitable contributions
c. Travel and entertainment
6.
Total
7. Income recorded on books this yeat not included on this return (itemize):
Tax-exempt interest
8. Deductions on this return not charged against book income this year (itemize):
a. Depreciation
b. Charitable contributions
9. Income
< Req 1
Req 2>
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