Paul Inc, a calendar year C-Corp and accrual method taxpayer, provides the following information and wants a Schedule M-1 prepared (state which line each amount should be on on Schedule M-1). Journal entries should also be prepared.

Net Income per Book	535,000
Tax Exempt Interest Income	300
Federal Income Tax Paid	12,000
Life Insurance Proceeds	80,000-received upon death of key employee-the President
Capital Loss	8,000
MACRS Tax Depreciation	200,000 - depreciation taken on the tax return
Book Depreciation	20,000 - depreciation taken for book (financial statement)
Meals and Entertainment	6,000 - reported on financial statement

Journal Entries:

	M-1 JournalEntries
	Finanial Stmt	Debit	Credit	Tax Return
Expense
Fed Tax Expense
Depreciation Expense
Excess Captial Loss
Meals and Entert. Expense
Tax Exempt Int. Expense
Life Insurance Premiums(key employee
Income:
Tax Exempt Income
Life Insurance Proceeds (key employee)