Luong Corporation, a calendar year, accrual basis corporation, reported $$1\mathrm{.}10$ 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 $$202,000.$

Luong's book income included $$12,000$ of dividends received from a domestic corporation in which Luong owns a $25$ percent stock

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

Luong recognized $$12,000$ of capital losses this year and no capital gains.

Luong recorded $$9,000$ of book expense for meals not provided by a restaurant and $$11,000$ of book expense for entertainment

costs.

Luong's depreciation expense for book purposes totaled $$402,000.$ MACRS depreciation was $$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.

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

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