Required part A n B

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 totaling $54,000. Further detail shows that $40,000 of the meals were provided by o restaurant and the remaining $6,000 were not provided by a restaurant. These costs were incurred by Grim sales personnel, are reasonable in amount, and are documented in company records. - During January of the current year; Grim was sued by one of its emplayees 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 liability (and related book expense) for $50,000, reflecting the company's likely liablity 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. experise of $30,000, calculated as 1.5 percent of sales revenue, Actual write offs of accounts recelvable during the year totaled $22,000 - MACRS depreciation for the year totals $95,000. Prepare a Schedule M-1, page 6, Form 1120, reconciling Grim's book and taxable income. Note: Any Expenses (Line 5) and Deductions (Line 8) that are not included under Depreciation, Charitable Contributions, and Travel and Entertainment should be combined in the corresponding line itern "Other". Enter all amounts as positive. Reconciliation of Income (Loss) per Books With Income per Return Required: a. 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. b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Grim's book and taxable income. 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. Note: Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter " 0 wherever required. 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. Note: Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter " 0 " wherever required