Luong Corporation, a calendar year, accrual basis corporation, reported $$1\mathrm{.}05$ million of net income after tax on its financial statements

prepared in accordance with GAAP. The corporation's books and records reveal the following information:

Luong's federal income tax expense per books was $$201,000.$

Luong's book income included $$11,000$ of dividends received from a domestic corporation in which Luong owns a $25$ percent stock

interest, and $$4,500$ of dividends from a domestic corporation in which Luong owns a $5$ percent stock interest.

Luong recognized $$11,000$ of capital losses this year and no capital gains.

Luong recorded $$8,600$ of book expense for meals not provided by a restaurant and $$10,500$ of book expense for entertainment

costs.

Luong's depreciation expense for book purposes totaled $$401,000.$ MACRS depreciation was $$475,000.$

Required:

a$.$ Compute Luong's federal taxable income and regular tax liability.

b$.$ Prepare a Schedule M$-1,$ page $6,$ Form $1120,$ reconciling Luong's book and taxable income.