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Prepare a Schedule M-1, page 5, Form 1120, reconciling Cramers book and taxable income. Cramer Corporation, a calendar year, accrual basis corporation, reported $1.05 million
Prepare a Schedule M-1, page 5, Form 1120, reconciling Cramers book and taxable income.
Cramer Corporation, a calendar year, accrual basis corporation, reported $1.05 million of net income after tax on its 2018 financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: Cramer's federal income tax expense per books was $201,000. Cramer's book income included $11,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $4,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. Cramer recognized $11,000 of capital losses this year and no capital gains. Cramer recorded $8,600 of book expense for meals and $10,500 of book expense for entertainment costs. Cramer's depreciation expense for book purposes totaled $401,000. MACRS depreciation was $475,000. Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: Schedule M-3 required instead of Schedule M-1 if total assets are $10 million or more - see instructions 1 Net income (loss) per books 7 Income recorded on books this year not included on 2 Federal income tax per books this return (itemize): 3 Excess of capital losses over captial gains Tax-exempt interest: 4 Income subject to tax not recorded on books this year (itemize) 5 Expenses recorded on books this year not deducted on 8 Deductions on this return not charged against book this return (itemize): income this year (itemize): a Depreciation a Depreciation b Charitable contributions b Charitable contributions C Travel and entertainment c Other (include all items) d Other (include all items) 09 Add lines 7 and 8 6 Add lines 1 through 5 010 Income (page 1, line 28) - line 6 less line 9
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