ACC 460, FALL 2018 PROBLEM 4 C CORPORATION BOOK-TO-TAX RECONCILIATION.Sox Corporation, an accrual basis, calendar-year C corporation,
Question:
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
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston