Problem: Module 8 Textbook Problem 4 Learning Objective: 8-3 Prepare o reconciliation of book and toxable income Grim Corporation has income and expenses for its current fiscal year, recorded under generally accepted accounting principles, as shown in the following schedule. In addition, a review of Grim's books and records reveals the following information: - Grim expensed, for book purposes, meals totaling $46,000 and entertainment costs totaing $54,000. These costs were incutred by Grim sales personnel, are reasonable in amount, and are documented in company records. Assume for tax purposes that the meal costs are 50% deductible and that the entertainment costs are not deductible. - During January of the current year, Grim was sued by one of its employees as a resuit of a work-related accident. The suit has not - Grim expensed, for book purposes, meals totaling $46,000 and entertainment costs totaling $54,000. These costs were incurred by Grim sales personnel, are reasonable in amount, and are documented in company records. Assume for tax purposes that the meal costs are 50% deductible and that the entertainment costs are not deductible - During January of the current year, Grim was sued by one of its employees as a result of a work-related accident. The suit has not yet gone to court. However, Grim's auditors required the company to record a contingent fiability (and related book expense) for $50,000, reflecting the company's likely liability from the suit. - Grim recorded federal income tax expense for book purposes of $80,000 - Grim used the reserve method for calculating bad debt expenses for book purposes, its book income statement reflects bad debt expense of $30,000, calculated as 15 percent of sales revenue. Actual write-offs of accounts receivable during the year totaled $22.000 - MACRS depreciation for the year totals $95,000 Required: a. Complete the following table, reflecting Grim's book/tax differences for the curtent yeat, whether such differences are positive (increase taxable income) or negative (decrease taxable income), and the final numbers to be included in the calculation of taxable income on Grim's tax return. Complete the following table, reflecting Grim's book/tax differences for the current year, whether such differences are positive (increase taxable income) or negative (decrease taxable income), and the final numbers to be included in the calculation of Complete the following table, reflecting Grim's book/tax differences for the current year, whether such differences are positive (increase taxable income) or negative (decrease taxable income), and the final numbers to be included in the calculation of taxable income on Grim's tax return. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter 0 wherever required.)
