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, Reconciliation of Income (Loss) per Books with Income per Return . 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 expense which is not allowed for tax purposes 5,500 Deduction for a tax penalty not allowed for tax purposes 2,000 . Tax-exempt interest income included in book income but 4,200 not in tax income Calculate Loquat Corporation's taxable income for the current year based on the information given