Gosling,Inc.,a calendar year,accrual basis corporation,reported $756,000 net income after tax on its financial statements prepared in accordance with GAAP.The corporation's financial records reveal the following information: Corporate tax rate schedule.
Gosling earned $478,000 from a qualified domestic production activity.
Gosling earned $3,500 on an investment in tax-exempt municipal bonds.
Gosling's depreciation expense per books was $72,000,and its MACRS depreciation deduction was $105,000.
Gosling recorded $58,000 of business meals and entertainment expense for book purposes.
Gosling's federal income tax expense per books was $440,000.
a.Compute Gosling's taxable income and regular tax liability.
b.Prepare a Schedule M-1,page 5,Form 1120,reconciling Gosling's book and taxable income.

Question

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The Answer of Gosling,Inc.,a calendar year,accrual basis corporation,reported $756,000 net income after tax on its financial statements prepared in accordance with GAAP.The corporation's financial records reveal the following information: Corporate tax rate schedule.
Gosling earned $478,000 from a qualified domestic production activity.
Gosling earned $3,500 on an investment in tax-exempt municipal bonds.
Gosling's depreciation expense per books was $72,000,and its MACRS depreciation deduction was $105,000.
Gosling recorded $58,000 of business meals and entertainment expense for book purposes.
Gosling's federal income tax expense per books was $440,000.
a.Compute Gosling's taxable income and regular tax liability.
b.Prepare a Schedule M-1,page 5,Form 1120,reconciling Gosling's book and taxable income.