Question
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
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 net income per books = $632,000
Need to: Adjustment to calculate federal taxable income
Year 2 transactions
Year 2 transactions | Adjustment to calculate federal taxable income | ||||||||
1.
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2. 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. | |||||||||
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. | |||||||||
4. Ordinary gain on the sale of fully depreciated office equipment to a 60% shareholder:
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5. Gains (losses) on sales of investments in public companies recorded for book and tax purposes:
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6. Ordinary gains (losses) on sales of property to a 25% shareholder recorded for book and tax purposes:
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