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Required: a. Compute Luong's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income.

Required: a. Compute Luong's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Luong's book and taxable income. Note: 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. 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 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 d Other (include all items) 6 Add lines 1 through 5 THIS FORM IS A SIMULATION 1,150,000 7 Income recorded on books this year not included on 203,000 13,000 this return (itemize): Tax-exempt interest 0 8 Deductions on this return not charged against book income this year (itemize): a Depreciation b Charitable contributions c Other (include all items) 09 Add lines 7 and 8 1,366,000 10 Income (page 1, line 28) - line 6 less line 9 72,000 72,000 72,000 1,294,000 OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL.Ⓒ2022 McGraw-Hill Education. < Required A Required B > Show less A
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 Luong's book and taxable income. Note: 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. 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 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 d Other (include all items) 6 Add lines 1 through 5 THIS FORM IS A SIMULATION 1,150,000 7 Income recorded on books this year not included on 203,000 13,000 this return (itemize): Tax-exempt interest 0 8 Deductions on this return not charged against book income this year (itemize): a Depreciation b Charitable contributions c Other (include all items) 09 Add lines 7 and 8 1,366,000 10 Income (page 1, line 28) - line 6 less line 9 72,000 72,000 72,000 1,294,000 OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM IT SELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL.Ⓒ2022 McGraw-Hill Education. < Required A Required B > Show less A
Luong Corporation, a calendar year, accrual basis corporation, reported $1.15 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Luong's federal Income tax expense per books was $203,000. • Luong's book Income Included $13,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock Interest, and $5,500 of dividends from a domestic corporation in which Luong owns a 5 percent stock Interest. Luong recognized $13,000 of capital losses this year and no capital gains. • Luong recorded $9,600 of book expense for meals not provided by a restaurant and $11,500 of book expense for entertainment costs. • Luong's depreciation expense for book purposes totaled $403,000. MACRS depreciation was $475,000. Required: a. Compute Luong's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income. Complete this question by entering your answers in the tabs below. Required A Required B Compute Luong's federal taxable income and regular tax liability. Note: Enter your answers in whole dollars not in millions. Taxable income Tax liability $ S Answer is not complete. Amount 987,275 X 391,000 X < Required A Required B >
Transcribed Image Text:Luong Corporation, a calendar year, accrual basis corporation, reported $1.15 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Luong's federal Income tax expense per books was $203,000. • Luong's book Income Included $13,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock Interest, and $5,500 of dividends from a domestic corporation in which Luong owns a 5 percent stock Interest. Luong recognized $13,000 of capital losses this year and no capital gains. • Luong recorded $9,600 of book expense for meals not provided by a restaurant and $11,500 of book expense for entertainment costs. • Luong's depreciation expense for book purposes totaled $403,000. MACRS depreciation was $475,000. Required: a. Compute Luong's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income. Complete this question by entering your answers in the tabs below. Required A Required B Compute Luong's federal taxable income and regular tax liability. Note: Enter your answers in whole dollars not in millions. Taxable income Tax liability $ S Answer is not complete. Amount 987,275 X 391,000 X < Required A Required B >
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