Luong Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after...
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Luong Corporation, a calendar year, accrual basis corporation, reported $1 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 $200,000. - Luong's book income included $10,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $4,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest. - Luong recognized $10,000 of capital losses this year and no capital gains. - Luong recorded $8,000 of book expense for meals not provided by a restaurant and $10,000 of book expense for entertainment costs. - Luong's depreciation expense for book purposes totaled $400,000. 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
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Luong Corporation, a calendar year, accrual basis corporation, reported $1 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 $200,000. - Luong's book income included $10,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $4,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest. - Luong recognized $10,000 of capital losses this year and no capital gains. - Luong recorded $8,000 of book expense for meals not provided by a restaurant and $10,000 of book expense for entertainment costs. - Luong's depreciation expense for book purposes totaled $400,000. 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 