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Compute HC Inc.'s current-year taxable income given the following information relating to its 2020 activities. Also, compute HC's Schedule M-1 assuming that HC's federal income
Compute HC Inc.'s current-year taxable income given the following information relating to its 2020 activities. Also, compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000. UseExhibit 16-6.
- Gross profit from inventory sales of $310,000 (no book-tax differences).
- Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the corporation's earnings).
- Expensesother thanDRD, charitable contribution (CC), and net operating loss (NOL) are $300,000 (no book-tax differences).
- NOL carryover from prior year of $12,000.
- Cash charitable contribution of $50,000.
I found the answers and there is one line I don't understand:
Book income Book-tax difference taxable income
(50,000) 38,200 (11,800)
How can they calculate to come up with 38,200n please?
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