Quest, Inc., is a calendar-year, accrual-basis C corporation engaged in manufacturing. The Year 2 transactions from Quest's financial statements and tax records are provided. Enter the amounts to be reflected on Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return, as an adjustment to calculate federal taxable income in the associated cells below. Each transaction should be considered independently of the others. Enter increases to net income per books as positive, whole values and decreases to net income per books as negative, whole values using a leading minus (-) sign. If the amount is zero, enter a zero (0).

Year 2 Transactions	Adjustments to calculate federal taxable income
MACRS depreciation: $224,000 Sec. 179 deduction: $16,000 Book depreciation $200,000
Quest declared and paid a $40,000 cash dividend in June, Year 2, and declared a $30,000 cash dividend in December, Year 2, payable in January, Year 3.
$30,000 of cash contributions were paid in Year 2, and $10,000 of charitable contributions (approved by the board of directors) to qualifying organizations were accrued at the end of Year 2 and paid on the extended tax return filing date.
Gains (losses) on sales of investments in public companies recorded for book and tax purposes: Jan 15 $6,000 May 15 $(4,000) July 16 $(8,000) Sept 25 $2,000