Joseph Inc.
INCOME STATEMENT
	Tax	Book
Income
Consulting fees	1,850,000	1,850,000
Tax-exempt interest	0	2,000
Interest income on bank accounts	12,000	12,000
Total income	1,862,000	1,864,000
Expenses
Organization expenses	5,750	16,000
Office salaries	815,000	815,000
Salaries and wages	230,000	230,000
Rent	74,000	74,000
Utilities	11,000	11,000
Advertising	29,000	29,000
Repairs	3,250	3,250
Taxes	12,050	12,050
Employee benefits	3,015	3,015
Interest	8,000	8,000
Office supplies	9,015	9,015
Depreciation	74,000	32,000
Total expenses	1,274,080	1,242,330
Net income before contributions	587,920	621,670
Charitable contributions	61,000	77,000
Pre-tax income	526,920	544,670
Federal tax expense	190,000	184,500
Net income	336,920	360,170

Complete the items below that would appear on a book/tax reconciliation for Schedule M-1 on the IRS Form 1120, U.S. Corporation Income Tax Return, for Joseph's first year of operations. Based on the data provided in the lesson, enter the appropriate values in the associated cells in the Excel Spreadsheet. Please enter additions as positive whole numbers and subtractions as negative whole numbers. If an amount is zero, enter a zero. Note: The deduction for organizational expenses in the year was $5,707.

	Book/Tax Reconciliation for Schedule M-1
1	Net income per books
2	Federal income tax per books
3	Depreciation recorded on books not deducted on the return
4	Charitable contributions recorded on books not deducted on the return
5	Other expenses recorded on books not deducted on the return
6	Tax-exempt interest
7	Depreciation deducted on the return not expensed on the books
8	Taxable income per tax return