Can someone help with the first question on the 2nd page? Please note: Don't answer the multiple choice question on the first page. the first page is used as context for the first question on the 2nd page.

[17] For the current year, accrual-basis Corp. A's books and records reflected the following: Net income per books Accrued federal income tax Net capital loss Tax-exempt interest Book depreciation in excess of allowable tax depreciation $104,000 35,000 4,000 5.000 2.000 Based on the above facts, what is the amount of A 's taxable income? A. $69,000 B. $70,000 C. $140,000 D. $150,000 The correct answer is C. A. Federal income tax is added to, not subtracted from, book net income. Also, the net capital loss and excess book depreciation must be added back, and tax-exempt interest income must be subtracted. B. Federal income taxes are not subtracted; they are added back to book net income. C. Federal income tax, excess capital losses, and book depreciation in excess of tax depreciation are not deductible. These amounts must be added back to book income. Tax-exempt interest is not taxable and must be subtracted from book income. These adjustments are done on Schedule M-1 of the corporation tax return. Net income per books Add back: Federal income tax Net capital loss Excess book depreciation Subtract: Tax-exempt interest Taxable income $104,000 $145,000 $140,000(5.000) D. The tax-exempt inlerest is not added back it is subtracted from book net income. The comporate tax retum is known as Form 1120, the equivalent of individual Form 1040. One of the most important schedules in Form 1120 is Schedule M1, where the corporation indicates why taxable income differs from net income per books. 1. Please attach al completed Form 1120 Schedule M-1 (last page) and page 1 (company's name and lines 30-35). Assume no tax payments have been made, and the tax rate is 21 percent. Ignore Schedule J. Remember to attach Form 1120 including Schedule M-1 to your submission. (if you are wondering, as I am, why the accrued income taxes are so high; it could be that this question was designed when corporate tax rates were higher -35 percent). 2. Comment on what you have leamed. To get max credit, you must makean observation that teaches me something and is a pleasure to read