Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 8

Go to the IRS Web page (www.irs.gov) and print page 5 of a Form 1120. Complete Schedule M-1 for each of the following cases:
a. Corporate financial statement net income of $52,000 including tax expense of $15,000, charitable contributions of $3,000, and depreciation expense of $37,000. Depreciation expense for tax purposes is $46,000.
b. Corporate financial statement net income of $139,000 including tax expense of $68,000, charitable contributions of $28,000, depreciation expense of $103,000, and travel and entertainment expenses of $31,000. Depreciation expense for tax purposes is $145,000.
c. Corporate financial statement net income of $226,000 including tax expense of $111,000, charitable contributions of $16,000, municipal bond interest of $19,000, travel and entertainment expenses of 41,000, capital gains of $6,000, and depreciation expense of $142,000. Depreciation expense for tax purposes is $131,000 and the corporation has a $7,000 charitable contribution carryforward for the current year.