Problem 11-7 Schedule M-1 (LO 11.4) The Loquat Corporation has book net income of $50,000 for the current year. Included in this figure are the following items, which are reported on the corporation's Schedule M-1, Recondiliation of Income (Loss) per Books with Income per Retum. Federal income tax expense $7,500 Depreciation deducted on the books which is not deductible for tax purposes 10,000 . Deduction for 50 percent of meals and entertainment 5,500 expense which is not allowed for tax purposes Deduction for a tax penalty not allowed for tax purposes Tax-exempt interest income included in book income but 2,000 4,200 not in tax income Calculate Loquat Corporation's taxable Income for the current year based on the information glven