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. Add lines 7 and 8 10. Income SA 0 0 Description Book Income (Debit) Credit Book-tax Book-tax adjustments adjustments (Debit) Credit Taxable Income (Debit) Credit Gross profit Other income: Dividend income Gross Income Expenses: Business expenses other than DRD, CC, and NOL Federal income tax expense Total expenses before charitable contribution, NOL, and DRD Income before charitable contribution, NOL, and DRD NOL carryover from prior year Taxable income for charitable contribution limitation purposes (modified taxable income) Charitable contributions Taxable income before DRD Dividends received deduction (DRD) Book or Taxable income $ 0 $ 0 69 $ 0 $ 0 $ 0 $ 0 0
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. Add lines 7 and 8 10. Income SA 0 0 Description Book Income (Debit) Credit Book-tax Book-tax adjustments adjustments (Debit) Credit Taxable Income (Debit) Credit Gross profit Other income: Dividend income Gross Income Expenses: Business expenses other than DRD, CC, and NOL Federal income tax expense Total expenses before charitable contribution, NOL, and DRD Income before charitable contribution, NOL, and DRD NOL carryover from prior year Taxable income for charitable contribution limitation purposes (modified taxable income) Charitable contributions Taxable income before DRD Dividends received deduction (DRD) Book or Taxable income $ 0 $ 0 69 $ 0 $ 0 $ 0 $ 0 0
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 47P
Related questions
Question
a. and b. Compute MV Corporation's 2024 taxable income given the following information relating to its year 1 activities. Also, compute MV's Schedule M-1 assuming that MV's federal income tax expense for book purposes is $100,000. Use Exhibit 16-7.
- Gross profit from inventory sales of $500,000 (no book–tax differences).
- Dividends MV received from 25 percent-owned corporation of $100,000 (assume this is also MV's pro rata share of the distributing corporation's earnings).
- Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL) are $350,000 (no book–tax differences).
- NOL carryover from 2022 of $10,000.
- Cash charitable contribution of $120,000.
Transcribed Image Text: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. Add lines 7 and 8
10. Income
SA
0
0
Transcribed Image Text:Description
Book Income
(Debit) Credit
Book-tax Book-tax
adjustments adjustments
(Debit)
Credit
Taxable Income
(Debit) Credit
Gross profit
Other income:
Dividend income
Gross Income
Expenses:
Business expenses other than DRD, CC, and NOL
Federal income tax expense
Total expenses before charitable contribution, NOL, and DRD
Income before charitable contribution, NOL, and DRD
NOL carryover from prior year
Taxable income for charitable contribution limitation purposes
(modified taxable income)
Charitable contributions
Taxable income before DRD
Dividends received deduction (DRD)
Book or Taxable income
$
0
$
0
69
$
0
$
0
$
0 $
0
0
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