ACC 460, FALL 2018 PROBLEM 4 C CORPORATION BOOK TO TAX RECONCILIATION Sox Corporation, an accrual basis, calendar year C corporation, began operations on January 2, 2010 For each item below, determine the 2018 Schedule M 1 adjustment to reconcile book income to taxable income, i e , the amount and the effect ( or ) Net income per books $700,000 Provision for Federal income taxes, $190,000 Municipal bond interest, $10,000 During 2018, Sox increased its allowance for uncollectible accounts by $18,000 actual bad debts written off in 2018 were $20,000 Sox reported depreciation for financial purposes of $75,000 MACRS (including 179) for the year was $90,000 Sox acquired another corporation in 2016, paying $300,000 for goodwill Sox recorded a goodwill impairment loss of $50,000 for financial purposes in 2018 In December 2017, Sox received $25,000 as an advance payment for an order from a customer Sox reported the $25,000 as a liability (unearned income) on its balance sheet at 12 31 17 and as earned income in 2018 In December 2018, Sox received $40,000 as an advance payment for an order from a customer Sox reported the $40,000 as a liability (unearned income) on its balance sheet at 12 31 18 Sox reported gains of $20,000 and losses of $28,000 from the sale of investments in its Other Revenues Expenses section of its income statement Sox deducted a $10,000 excess charitable contribution carryover from 2017 on its 2018 tax return Sox received dividend income from a 15 owned corporation totaling $60,000 In May 2018, Sox paid a $10,000 fine to a local government for violating a local ordinance Taxable Income

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ACC 460, FALL 2018 PROBLEM 4 C CORPORATION BOOK TO TAX RECONCILIATION Sox Corporation, an accrual basis, calendar year C corporation, began operations on January 2, 2010 For each item below, determine the 2018 Schedule M 1 adjustment to reconcile book income to taxable income, i e , the amount and the effect (   or  )  Net income per books $700,000 Provision for Federal income taxes, $190,000 Municipal bond interest, $10,000 During 2018, Sox increased its allowance for uncollectible accounts by $18,000  actual bad debts written off in 2018 were $20,000  Sox reported depreciation for financial purposes of $75,000  MACRS (including 179) for the year was $90,000 Sox acquired another corporation in 2016, paying $300,000 for goodwill Sox recorded a goodwill impairment loss of $50,000 for financial purposes in 2018  In December 2017, Sox received $25,000 as an advance payment for an order from a customer Sox reported the $25,000 as a liability (unearned income) on its balance sheet at 12 31 17 and as earned income in 2018  In December 2018, Sox received $40,000 as an advance payment for an order from a customer Sox reported the $40,000 as a liability (unearned income) on its balance sheet at 12 31 18  Sox reported gains of $20,000 and losses of $28,000 from the sale of investments in its  Other Revenues   Expenses  section of its income statement  Sox deducted a $10,000 excess charitable contribution carryover from 2017 on its 2018 tax return  Sox received dividend income from a 15  owned corporation totaling $60,000  In May 2018, Sox paid a $10,000 fine to a local government for violating a local ordinance  Taxable Income

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ACC 460, FALL 2018 PROBLEM 4 C CORPORATION BOOK-TO-TAX RECONCILIATION.Sox Corporation, an accrual basis, calendar-year C corporation,

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Auditing a business risk appraoch

ACC 460, FALL 2018 PROBLEM 4 C CORPORATION BOOK-TO-TAX RECONCILIATION.Sox Corporation, an accrual basis, calendar-year C corporation,

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Auditing a business risk appraoch

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