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Posted on Jul 20, 2024

Problem 11-12 (Algo) [LO 11-3, 11-4] Cramer Corporation, a calendar year, accrual basis corporation, reported $1.65 million of net income after tax on its financial

Problem 11-12 (Algo) [LO 11-3, 11-4]

Cramer Corporation, a calendar year, accrual basis corporation, reported $1.65 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporations books and records reveal the following information:

Cramer's federal income tax expense per books was $213,000.
Cramer's book income included $23,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $10,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.
Cramer recognized $23,000 of capital losses this year and no capital gains.
Cramer recorded $14,600 of book expense for meals not provided by a restaurant and $16,500 of book expense for entertainment costs.
Cramer's depreciation expense for book purposes totaled $413,000. MACRS depreciation was $475,000.

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Problem 11-12 (Algo) [LO 11-3, 11-4] Cramer Corporation, a calendar year, accrual basis corporation, reported $1.65 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: Cramer's federal income tax expense per books was $213,000. Cramer's book income included $23,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $10,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. Cramer recognized $23,000 of capital losses this year and no capital gains. Cramer recorded $14,600 of book expense for meals not provided by a restaurant and $16,500 of book expense for entertainment costs. Cramer's depreciation expense for book purposes totaled $413,000. MACRS depreciation was $475,000. Required: a. Compute Cramer's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income. Complete this question by entering your answers in the tabs below. Required A Required B Compute Cramer's federal taxable income and regular tax liability. (Enter your answers in whole dollars not in millions.) Amount Taxable income Tax liability Problem 11-12 (Algo) (LO 11-3, 11-4] Cramer Corporation, a calendar year, accrual basis corporation, reported $1.65 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: Cramer's federal income tax expense per books was $213,000. Cramer's book income included $23,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $10,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest. Cramer recognized $23,000 of capital losses this year and no capital gains. Cramer recorded $14,600 of book expense for meals not provided by a restaurant and $16,500 of book expense for entertainment costs. Cramer's depreciation expense for book purposes totaled $413,000. MACRS depreciation was $475,000. Required: a. Compute Cramer's federal taxable income and regular tax liability. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income. Complete this question by entering your answers in the tabs below. quired A Required B Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable income. (Any Expenses (Line 5) and Deductions (Line 8) that are not included under Depreciation, Charitable contributions, and Travel and Entertainment should be combined in the corresponding line item "Other". Enter all amounts as positive. Enter your answers in whole dollars not in millions.) Show less Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books Income recorded on books this year not included on 2 Federal income tax per books this return (itemize): 3 Excess of capital losses over capital gains Tax-exempt interest 4 Income subject to tax not recorded on books this year (itemize): 0 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) 0 d Other (include all items) 09 Add lines 7 and 8 0 6 Add lines 1 through 5 0 10 Income (page 1, line 28) - line 6 less line 9 0 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education.