Cramer Corporation, a calendar year, accrual basis corporation, reported $1.25 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 $205,000. Cramer's book income included $15,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $6,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. . Cramer recognized $15,000 of capital losses this year and no capital gains. . Cramer recorded $10,600 of book expense for meals and $12.500 of book expense for entertainment costs. . Cramer's depreciation expense for book purposes totaled $405,000. 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 Required A Required B Compute Cramer's federal taxable income and regular tax liability. (Enter your answers in whole dollars not in millions.) Taxable income Tax liability Amount he tabs below. Required A Required B >
Cramer Corporation, a calendar year, accrual basis corporation, reported $1.25 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 $205,000. Cramer's book income included $15,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $6,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. . Cramer recognized $15,000 of capital losses this year and no capital gains. . Cramer recorded $10,600 of book expense for meals and $12.500 of book expense for entertainment costs. . Cramer's depreciation expense for book purposes totaled $405,000. 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 Required A Required B Compute Cramer's federal taxable income and regular tax liability. (Enter your answers in whole dollars not in millions.) Taxable income Tax liability Amount he tabs below. Required A Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cramer Corporation, a calendar year, accrual basis corporation, reported $1.25 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 $205,000.
Cramer's book income included $15,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent
stock interest, and $6,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.
Cramer recognized $15,000 of capital losses this year and no capital gains.
.
. Cramer recorded $10,600 of book expense for meals and $12.500 of book expense for entertainment costs.
. Cramer's depreciation expense for book purposes totaled $405,000. 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.)
Taxable income
Tax liability
Amount
< Required A
Required B >
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