Cramer Corporation, a calendar year, accrual basis corporation, reported $1.70 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporations books and records reveal the following information: Cramer's federal income tax expense per books was $214,000. Cramer's book income included $24,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $11,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. Cramer recognized $24,000 of capital losses this year and no capital gains. Cramer recorded $15,000 of book expense for meals not provided by a restaurant and $17,000 of book expense for entertainment costs. Cramer's depreciation expense for book purposes totaled $414,000. MACRS depreciation was $475,000.

Compute Cramer's federal taxable income and regular tax liability and Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramers book and taxable income.