Compute HC Inc.s current-year taxable income given the following information relating to its 2019 activities. Also, compute HCs Schedule M-1 assuming that HCs federal income tax expense for book purposes is $30,000. Gross profit from inventory sales of $310,000 (no booktax differences). Dividends HC received from 28% owned corporation of $120,000 (this is also HCs pro rata share of the corporations earnings). Expenses other than DRD, charitable contribution, and net operating loss (NOL), are $300,000 (no booktax differences). NOL carryover from prior year of $12,000. Cash charitable contribution of $50,000.

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Description Book Income | (Dr) or $ 310,000 Book-tax adjustments (Dr) c Taxable Income (Dr) cr 310,000 120,000 430,000 120,000 430,000 $ (300,000) Gross profit Other income: Dividend income Gross Income Expenses: Business expenses other than DRD, CC, and NOL Federal income tax expense Total expenses before charitable contribution, NOL, and DRD deduction Income before charitable contribution, NOL and DRD NOL carryover from prior year Taxable income for charitable contribution limitation purposes (modified taxable income) (300,000) (30,000) 30,000 (330,000) (300,000) $ 100,000 130,000 (12,000) (12,000) $ 118,000 Charitable contributions 38,200 (11,800) Taxable income before DRD 106,200 Dividends received deduction (DRD) (94,560) (94,560) 11,640 Book/Taxable income $ 100,000 EGO $ 68,200 $