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Sariah's Home Entertainment LLC (SHE LLC) is a company that sells in-home entertainment systems. In 2021, SHE had provided you, its CPA, with the following
Sariah's Home Entertainment LLC ("SHE LLC") is a company that sells in-home entertainment systems. In 2021, SHE had provided you, its CPA, with the following information about its 2021 activities: Gross profit from sales of home entertainment systems $475,000 (no book-tax differences). Dividends SHE received from a 21 percent-owned corporation of $137,000. SHE uses the equity method of accounting this minority-owned subsidiary and this also represents its pro rata share of the corporation's earnings. Expenses other than the dividend received deduction (DRD), charitable contribution (CC) and net operating loss (NOL), are $339,000. SHE's tax depreciation exceeded book depreciation by $18,500 NOL carryover from prior year of $17,000. SHE's book federal income tax expense is $57,000. 1. What is SHE's book net income? 2. What is SHE's modified DRD taxable income? 3. What is SHE'S DRD? 4. What is SHE's taxable income after the NOL carryover and the DRD? 5. What is SHE's taxable income on Schedule M-1
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