Camden Corporation, a calendar year, accrual basis corporation, reported $5 million of net income after tax on its current year financial statements prepared in accordance with GAAP. In addition, the following information is available from Camdens books and records:

• Federal income tax expense per books was $1.5 million.
• Camden incurred $30,000 of meals not provided by a restaurant and $25,000 of entertainment expenses.
• Camden sold two pieces of equipment used in its business for total sales proceeds of $400,000. The equipments original cost was $2 million. Book depreciation prior to sale totaled $1.2 million; tax depreciation totaled $1.5 million.
• Camden uses the reserve method of accounting for bad debts. Additions to the reserve during the year totaled $400,000. Accounts receivable actually written off during the year totaled $450,000.
• Camdens depreciation expense for book purposes totaled $900,000. Tax depreciation computed under MACRS is $1.25 million.

Required:

1. Determine Camdens taxable income and regular tax liability.
2. Complete Schedule M-1, page 6, Form 1120

Complete Schedule M-1, page 6, Form 1120. Note: Any Expenses (Line 5) and Deductions (Line 8) that are not included under Depreciation, Charitable Contributions, and Travel and Entertainment should be combined in the corresponding line item Other. Enter all amounts as positive. Consider intermediate values in dollars and not in millions. Enter your answers in whole dollars not in millions.

Schedule M-1	Reconciliation of Income (Loss) per Books With Income per Return
	Note: The corporation may be required to file Schedule M-3. See instructions.
1 Net income (loss) per books				7 Income recorded on books this year not included on
2 Federal income tax per books				this return (itemize):
3 Excess of capital losses over capital gains				Tax-exempt interest
4 Income subject to tax not recorded on books this year
(itemize):
5 Expenses recorded on books this year not deducted on				8 Deductions on this return not charged against book
this return (itemize):				income this year (itemize):
a Depreciation				a Depreciation		350,000
b Charitable contributions				b Charitable contributions
c Travel and entertainment				c Other (include all items)
d Other (include all items)				9 Add lines 7 and 8
6 Add lines 1 through 5				10 Income (page 1, line 28) - line 6 less line 9