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Problem 1 1 - 1 2 ( Algo ) [ LO 1 1 - 3 , 1 1 - 4 ] Luong Corporation, a calendar

Problem 11-12(Algo)[LO 11-3,11-4]
Luong Corporation, a calendar year, accrual basis corporation, reported $1.60 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporations books and records reveal the following information:
Luong's federal income tax expense per books was $212,000.
Luong's book income included $22,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $10,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest.
Luong recognized $22,000 of capital losses this year and no capital gains.
Luong recorded $14,000 of book expense for meals not provided by a restaurant and $16,000 of book expense for entertainment costs.
Luong's depreciation expense for book purposes totaled $412,000. MACRS depreciation was $475,000.
Required:
Compute Luong's federal taxable income and regular tax liability.
Prepare a Schedule M-1, page 6, Form 1120, reconciling Luongs book and taxable income.

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