Question

Problem 11-8 (Algorithmic)
Schedule M-1 (LO 11.4)

The Loquat Corporation has book net income of $186,400 for the current year. 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.

• Federal income tax expense $27,960 • Depreciation deducted on the books which is not deductible for tax purposes 37,280 • Deduction for 50 percent of meals expense which is not allowed for tax purposes 16,776 • Deduction for a tax penalty not allowed for tax purposes 7,456 • Tax-exempt interest income included in book income but not in tax income 11,184

Calculate Loquat Corporation's taxable income for the current year based on the information given.
$

Answer 1

Sclution Re- Cenclatien 9tetuyn Pen book nth Income Income (Less pet Schedule M-1 Net Inceme (les) per book 186400 Add 2 Fediral Inceme Tax expuse 27960 Erpenge recerded in the book Add 3. This year not dadvcted on the Tetum 3न २०० a Deprectaton 1676 b 50 meal r Entetatmert Tax 61512 A456 Tax penalsticr C. Les 4Inceme gulorded inthe bork ThYear notsneloded 'n Tax etorn a Tax exempt nout Tnceme 264 688