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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

Year 2 transactions

Adjustment to calculate federal taxable income

4.Ordinary gain on the sale of fully depreciated office equipment to a 60% shareholder:

Gain recorded per books	$8,000
Gain calculated for tax purposes	2,000