The Loquat Corporation has book net income of $50,000 for 2014. Included in this figure are the following items, which are reported on the corporation's Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return. Calculate Loquat Corporation's taxable income for 2014 based on the information given. Federal income tax expense: $7,500 Depreciation deducted on the books which is not deductible for tax purposes: $10,000 Deduction for 50 percent of meals and entertainment expense which is not allowed for tax purposes: $4,500 Deduction for a tax penalty not allowed for tax purposes: $2,000 Tax-exempt interest income included in book income but not in tax income: $3,000
The Loquat Corporation has book net income of $50,000 for 2014. Included in this figure are the following items, which are reported on the corporation's Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return. Calculate Loquat Corporation's taxable income for 2014 based on the information given. Federal income tax expense: $7,500 Depreciation deducted on the books which is not deductible for tax purposes: $10,000 Deduction for 50 percent of meals and entertainment expense which is not allowed for tax purposes: $4,500 Deduction for a tax penalty not allowed for tax purposes: $2,000 Tax-exempt interest income included in book income but not in tax income: $3,000
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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Transcribed Image Text:The Loquat Corporation has book net income of $50,000 for 2014.
Included in this figure are the following items, which are reported on the
corporation's Schedule M-1, Reconciliation of Income (Loss) per Books
with Income per Return.
Calculate Loquat Corporation's taxable income for 2014 based on the
information given.
Federal income tax expense: $7,500
Depreciation deducted on the books which is not deductible for tax
purposes: $10,000
Deduction for 50 percent of meals and entertainment expense which is not
allowed for tax purposes: $4,500
Deduction for a tax penalty not allowed for tax purposes: $2,000
Tax-exempt interest income included in book income but not in tax
income: $3,000
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