Below are the M-1 items for Brown Corp for 2014. You need to complete attachment below.

The following information for 2014 relates to Brown Corp, a calendar year, accrual method taxpayer.

Net Income per books (after-tax) $250,000 Federal income tax per books 122,250 Meals & Entertainment (amount deducted on GAAP financial statements) 8,400 Depreciation (amount deducted on GAAP financial statements) 145,000 Depreciation (amount calculated for tax purposes under MACRS)130,000 Fine for Speeding tickets 6,250 Amortization (GAAP) 0 Amortization (Tax) 10,750 Country Club Dues 11,000 Accrued Vacation not deducted on 12/31/13 Return 15,000 Accrued Vacation @ 12/31/14 (7,500 paid by 3/15/15) 25,000 Allowance for Bad Debts on Balance Sheet @ 12/31/13 13,200 Allowance for Bad Debts on Balance Sheet @ 12/31/14 15,750

The M-1?s for most of the Income Statement items (expenses) are just the amount of the expense, but for the Balance Sheet items we usually have to take the change in the value from the prior year to the current year.

My professor has informed me that taxable income should be 403,000!!!

Page 5 Form 1120 (2013) Schedule L Balance Sheets per Books Beginning of tax year (a) Assets 1 . . Cash Trade notes and accounts receivable . Less allowance for bad debts . . . Inventories . . . . . . . . . U.S. government obligations . . . Tax-exempt securities (see instructions) Other current assets (attach statement) Loans to shareholders . . . . . Mortgage and real estate loans . . . Other investments (attach statement) . Buildings and other depreciable assets Less accumulated depreciation . . . Depletable assets . . . . . . . Less accumulated depletion . . . . Land (net of any amortization) . . . Intangible assets (amortizable only) . Less accumulated amortization . . . Other assets (attach statement) . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 18 19 20 21 22 Accounts payable . . . . . . . . . Mortgages, notes, bonds payable in less than 1 year Other current liabilities (attach statement) . . Loans from shareholders . . . . . . . Mortgages, notes, bonds payable in 1 year or more Other liabilities (attach statement) . . . . Capital stock: a Preferred stock . . . . b Common stock . . . . Additional paid-in capital . . . . . . . Retained earningsAppropriated (attach statement) Retained earningsUnappropriated . . . Adjustments to shareholders' equity (attach statement) Less cost of treasury stock . . . . . . Total liabilities and shareholders' equity . . (b) (c) (d) . 2a b 3 4 5 6 7 8 9 10a b 11a b 12 13a b 14 15 End of tax year ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Liabilities and Shareholders' Equity 23 24 25 26 27 28 Schedule M-1 ( ) ( ) Reconciliation of Income (Loss) per Books With Income per Return Note: Schedule M-3 required instead of Schedule M-1 if total assets are $10 million or moresee instructions 1 Net income (loss) per books . . . . . . 2 Federal income tax per books . . . . . 3 Excess of capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 5 Expenses recorded on books this year not deducted on this return (itemize): 6 4 Deductions on this return not charged against book income this year (itemize): a Depreciation . . $ b Charitable contributions $ 9 10 Add lines 7 and 8 . . . . . . Income (page 1, line 28)line 6 less line 9 . Depreciation . . . . $ Charitable contributions . $ Travel and entertainment . $ Add lines 1 through 5 . Schedule M-2 1 2 3 Income recorded on books this year not included on this return (itemize): Tax-exempt interest $ 8 a b c 7 . . . . . . . Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L) Balance at beginning of year Net income (loss) per books . Other increases (itemize): Add lines 1, 2, and 3 . . . . . . . . . . . . . . . . . . 5 6 7 8 Distributions: a Cash . b Stock . c Property Other decreases (itemize): . . . . . . . . . Add lines 5 and 6 . . . . . . Balance at end of year (line 4 less line 7) Form 1120 (2013)