Luong Corporation, a calendar year, accrual basis corporation, reported $$1\mathrm{.}20$ million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation$$s books and records reveal the following information:

Luong's federal income tax expense per books was $$204,000.$

Luong's book income included $$14,000$ of dividends received from a domestic corporation in which Luong owns a $25$ percent stock interest, and $$6,000$ of dividends from a domestic corporation in which Luong owns a $5$ percent stock interest.

Luong recognized $$14,000$ of capital losses this year and no capital gains.

Luong recorded $$10,000$ of book expense for meals not provided by a restaurant and $$12,000$ of book expense for entertainment costs.

Luong's depreciation expense for book purposes totaled $$404,000.$ MACRS depreciation was $$475,000.$

Required:

Compute Luong's federal taxable income and regular tax liability.Problem $11-12($Algo$)[$LO $11-3,11-4]$

Luong Corporation, a calendar year, accrual basis corporation, reported $$1\mathrm{.}20$ 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 $$204,000.$

Luong's book income included $$14,000$ of dividends received from a domestic corporation in which Luong owns a $25$ percent stock

interest, and $$6,000$ of dividends from a domestic corporation in which Luong owns a $5$ percent stock interest.

Luong recognized $$14,000$ of capital losses this year and no capital gains.

Luong recorded $$10,000$ of book expense for meals not provided by a restaurant and $$12,000$ of book expense for entertainment

costs.

Luong's depreciation expense for book purposes totaled $$404,000.$ MACRS depreciation was $$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.

Complete this question by entering your answers in the tabs below.

Required $A$

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

Note: Enter your answers in whole dollars not in millions.