Mondial Corporation's financial accounting records show it had gross revenue of $980,000, cost of goods sold of $420,000, operating expenses of $380,000, and $4,000 of dividends received from a 40% owned company. Its operating expenses included the following:
$6,000 of life insurance premiums on which it was the beneficiary
$22,000 of meals and entertainment expenses
$30,000 of charitable contributions
a. Determine Mondial Corporation's taxable income.
b. Determine Mondial Corporation's income tax liability.
c. Determine Mondial Corporation's income tax liability if book depreciation is $15,000 less than tax depreciation.