[The following information applies to the questions displayed below.] XYZ is a calendar-year corporation that began business on January 1, 2022. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use: Exhibit 16:6. iterenue from sales Cont of feoosis solif Gross profit. Other income: Inccent frow investacnt in corporate itock Interest Incone Capital gain: (losses). Gain or loss from disposition of flued astets Mlacellaneous incone Groes Income Coepensation Stock optlan conpensation Expensesti Advertising kieparr and Maintenance ilad Debt expense. Deprectation Marranty rimenses Charitable donattops Meals (all fron restourants) Goodvill impoirment Drganizational expenditures oeber expenses Total rxpenses Incone before taxes Provisionifon incone toxes Net Income after-takes 1. XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1.000,000 of income: for the year. XYZ accounted for its investment in HC under the equity method, and it recorded its pro rata share of HC:'s earnings for the year. HC also distributed a $200,000 dividend to XYZ. For tax purposes. HC reports the actual dividend recelved as income, not the pro rata share of HC 's earnings 2. Of the $20,000 interest income, $5.000 was from a City of Seattle bond, $7,000 was from a Tacoma City band, 56,000 Was from a fully taxable corporate bond, and the remaining $2.000 was from a money market account. 3. This gain is from equipment that XYZ purchased in February and sold in December (l.e. it does not qualify as s12zi gain). 4. This includes total officer compensation of $2,500,000 (no one officer received more than $1,000.000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (recipients are officers). 6. XYZ actually wrote off $27,000 of its accounts receivable as uncollectible. 7. Tax depreciation was $1,900,000. 8. In the current year, XYZ did not make any actual payments on warranties it provided to customers 9. XYZ made $500,000 of cash contributions to charities during the year: 10. On July 1 of this year, XYZ acquired the assets of another business. In the process, it acquired $300,000 of goodwil Al the end of the year, XYZ wrote off $30,000 of the goodwill as impaired 11. XYZ expensed all of its organizational expenditures for book purposes. XYZ expensed the maximum amount of: organizational expenditures allowed for tax purposes. 12. The other expenses do not contain any items with book-tax differences. 13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYz,15 not subject to state incorme taxes. Estimated tax information: XYZ made four equal estimated tax payments totaling $360,000 ( $90,000 per quarter). For purposes of estimated tax liabilities, assume XYZ was in existence in 2021 and that in 2021 it reported a tax liability of $500,000 During 2022 , XYZZ determined its taxable income at the end of each of the four quarters as follows: Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. Note: Do not round intermediate calculotions. Round your answers to the nearest dollar amount. c. Complete XYZ's Schedule M-1. Note: Enter all omounts as positive numbers. 1. Net income (loss) per books 2. Federal income tax provision 3. Excess of capital losses over capltal gains 4. Income subject to tax not recorded on books this year (itemize) 5. Expenses recorded on books this year not deducted on this retum (fernize) a. Dopreciation b. Contributions cartyover c. Meals Stock option compensation (incentive stock options) Bad debt expense: Warranty expense Goodwill impairment Organizational expenditures 6. Tolal 7. Income recorded on books this year not included on this rofum ([iemize) Tax-exempt interest Income from investment in corporate stock 8 Deductions on this return not charged against book income this year fitemlieg Required information 0. Voritnoumons carryover c. Meals Stock option compensation (incentive stock options) Bad debt uxpense Warranty expense Goodwill impairment Organizational expenditures 6. Total 7. Income recorded on books this year not includod on this return (itemize): Tax-excempt interest Income from investment in corporate stock 8. Deductions on this return not charged against book income thls year (itenize) a. Depreciation b. Contrlbutions carryover 9. Total 10. Income