Schedule M-1 (LO 11.4) Caloundra Corporation has book income of $40,000. Included in the book income is $3,000 of tax-exempt interest, $7,000 of book income tax expense, and a $2.000 non- deductible fine. Also included in book income are $10,000 of dividends Caloundra received from a 30% owned corporation Using this information and Form 1120, provide the amounts that go on each line on the form. Click here to access a blank Form 1120 and accompanying instructions. a. Form 1120, Schedule M-1 Line 1 $ 40,000 b. Form 1120, Schedule M-1, Line 10 $ 34,000 X 42,000 x c. d. Form 1120, Page 1, Line 28 Form 1120, Schedule C, Line 2(a) Form 1120, Schedule C, Line 2(c) 10,000 8,000 x e. Form 1120, Schedule C, Line 24 8,000 X 8,000 Form 1120, Page 1, Line 295 Form 1120, Page 1, Line 30 g. 34,000 7 Chock My Work Because of various provisions in the tax law, a corporation's taxable income seldom is the same as its accounting income (commonly referred to as "book Income"). The purpose of Schedule M-1 of the corporate tax return is to reconcile a corporation's book income to its taxable income, computed before the net operating loss and special deductions such as the dividends received deduction On the left side of Schedule M 1 are adjustments that must be added to book income, and on the right side of the schedule are adjustments that must be Previous Next >