Cramer Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its 2020 financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Cramer's federal income tax expense per books was $200,000. • Cramer's book income included $10,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $4,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. • Cramer recognized $10,000 of capital losses this year and no capital gains. • Cramer recorded $8,000 of book expense for meals and $10,000 of book expense for entertainment costs. • Cramer's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000. Required: a. Compute Cramer's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income.
Cramer Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its 2020 financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Cramer's federal income tax expense per books was $200,000. • Cramer's book income included $10,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $4,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. • Cramer recognized $10,000 of capital losses this year and no capital gains. • Cramer recorded $8,000 of book expense for meals and $10,000 of book expense for entertainment costs. • Cramer's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000. Required: a. Compute Cramer's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
my calculation is not right
![Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income. (Any Expenses (Line 5) and Deductions (Line 8) that
are not included under Depreciation, Charitable Contributions, and Travel and Entertainment should be combined in the corresponding line item
"Other". Enter all amounts as positive. Enter your answers in whole dollars not in millions.)
Show less A
Schedule M-1
Reconciliation of Income (Loss) per Books With Income per Return
Note: The corporation may be required to file Schedule M-3. See instructions
1,000,000 7 Income recorded on books this year not included on
1 Net income (loss) per books
2 Federal income tax per books
3 Excess of capital losses over capital gains
200,000
this return (itemize):
Tax-exempt interest
4 Income subject to tax not recorded on books this year
(itemize):
8 Deductions on this return not charged against book
5 Expenses recorded on books this year not deducted on
this return (itemize):
income this year (itemize):
a Depreciation
b Charitable contributions
c Other (include all items)
a Depreciation
75,000
b Charitable contributions
c Travel and entertainment
d Other (include all items)
6 Add lines 1 through 5
THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS
4,000
75,000
75.000
4,000 9 Add lines 7 and 8
1,204,000 10 Income (page 1, line 28) - line 6 less line 9
1,129,000
OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. © 2020 McGraw-Hill Education.
< Required A
Required B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0736983-6e49-4161-a1ae-4805196f2b9c%2F5ae41963-61d8-42b2-ab46-bf206450f043%2Ff6vt5c6_processed.png&w=3840&q=75)
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income. (Any Expenses (Line 5) and Deductions (Line 8) that
are not included under Depreciation, Charitable Contributions, and Travel and Entertainment should be combined in the corresponding line item
"Other". Enter all amounts as positive. Enter your answers in whole dollars not in millions.)
Show less A
Schedule M-1
Reconciliation of Income (Loss) per Books With Income per Return
Note: The corporation may be required to file Schedule M-3. See instructions
1,000,000 7 Income recorded on books this year not included on
1 Net income (loss) per books
2 Federal income tax per books
3 Excess of capital losses over capital gains
200,000
this return (itemize):
Tax-exempt interest
4 Income subject to tax not recorded on books this year
(itemize):
8 Deductions on this return not charged against book
5 Expenses recorded on books this year not deducted on
this return (itemize):
income this year (itemize):
a Depreciation
b Charitable contributions
c Other (include all items)
a Depreciation
75,000
b Charitable contributions
c Travel and entertainment
d Other (include all items)
6 Add lines 1 through 5
THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS
4,000
75,000
75.000
4,000 9 Add lines 7 and 8
1,204,000 10 Income (page 1, line 28) - line 6 less line 9
1,129,000
OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. © 2020 McGraw-Hill Education.
< Required A
Required B >
![Problem 11-12 (Static) [LO 11-3, 11-4]
Cramer Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its 2020 financial
statements prepared in accordance with GAAP. The corporation's books and records reveal the following information:
Cramer's federal income tax expense per books was $200,000.
• Cramer's book income included $10,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent
stock interest, and $4,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.
• Cramer recognized $10,000 of capital losses this year and no capital gains.
Cramer recorded $8,000 of book expense for meals and $10,000 of book expense for entertainment costs.
Cramer's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000.
Required:
a. Compute Cramer's federal taxable income and regular tax liability.
b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute Cramer's federal taxable income and regular tax liability. (Enter your answers in whole dollars not in millions.)
Amount
Taxable income
Tax liability
$
1,139,000
239,190:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0736983-6e49-4161-a1ae-4805196f2b9c%2F5ae41963-61d8-42b2-ab46-bf206450f043%2Fihvh2hq_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 11-12 (Static) [LO 11-3, 11-4]
Cramer Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its 2020 financial
statements prepared in accordance with GAAP. The corporation's books and records reveal the following information:
Cramer's federal income tax expense per books was $200,000.
• Cramer's book income included $10,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent
stock interest, and $4,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.
• Cramer recognized $10,000 of capital losses this year and no capital gains.
Cramer recorded $8,000 of book expense for meals and $10,000 of book expense for entertainment costs.
Cramer's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000.
Required:
a. Compute Cramer's federal taxable income and regular tax liability.
b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute Cramer's federal taxable income and regular tax liability. (Enter your answers in whole dollars not in millions.)
Amount
Taxable income
Tax liability
$
1,139,000
239,190:
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