XYZ is a calendar-year corporation that began business on January 1, 2018. 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. XYZ corp. Income statement Book For current year Income $ 40,000,000 (27,000,000) $ 13,000,000 Revenue from sales Cost of Goods Sold Gross profit Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) Gain or loss from disposition of fixed assets (4,000) 3,0003 Miscellaneous income 50,000 $ 13,369,000 Gross Income Expenses: (7,500,000,4 (200,000,5 (1,350,000) ( 75,000) (22,000) (41,000,6 (1,400,000,7 (70,000,8 (500,000,9 (18,000) ( 30,000,10 (44,000,11 (140,000,12 $(11,390,000) $ 1,979,000 Compensation Stock option compensation Advertising Repairs and Maintenance Rent Bad Debt pense Depreciation Warranty expenses Charitable donations Meals Goodwill impairment Organizational expenditures Other expenses Total expenses Income before taxes (720,000,13 $ 1,259,00014 Provision for income taxes Net Income after taxes c. Complete XYZ's Schedule M-1. (Enter all amounts as positive numbers.) Schedule M1 Schedule M1 Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books 2 Federal income tax per books 7 Income recorded on books this year not included e this return (itemize): Tax-exempt interest Income from investment in Corp Stock 3 Excess capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 08 Deductions on this retum not charged against book income this year (itemize): a Depreciation b Charitable contributions c Other (itemize): 5 Expenses recorded on books this year not deducted on this return (itemize): a Depreciation b Charitable contributions c Travel and entertainment Other (itemize): 09 Add lines 7 and 8 6 Add lines 1 through 5 10 Income (page 1, line 28)-line 6 less line 9 THIS FORM Is A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. next> XYZ is a calendar-year corporation that began business on January 1, 2018. 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. XYZ corp. Income statement Book For current year Income $ 40,000,000 (27,000,000) $ 13,000,000 Revenue from sales Cost of Goods Sold Gross profit Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) Gain or loss from disposition of fixed assets (4,000) 3,0003 Miscellaneous income 50,000 $ 13,369,000 Gross Income Expenses: (7,500,000,4 (200,000,5 (1,350,000) ( 75,000) (22,000) (41,000,6 (1,400,000,7 (70,000,8 (500,000,9 (18,000) ( 30,000,10 (44,000,11 (140,000,12 $(11,390,000) $ 1,979,000 Compensation Stock option compensation Advertising Repairs and Maintenance Rent Bad Debt pense Depreciation Warranty expenses Charitable donations Meals Goodwill impairment Organizational expenditures Other expenses Total expenses Income before taxes (720,000,13 $ 1,259,00014 Provision for income taxes Net Income after taxes c. Complete XYZ's Schedule M-1. (Enter all amounts as positive numbers.) Schedule M1 Schedule M1 Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books 2 Federal income tax per books 7 Income recorded on books this year not included e this return (itemize): Tax-exempt interest Income from investment in Corp Stock 3 Excess capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 08 Deductions on this retum not charged against book income this year (itemize): a Depreciation b Charitable contributions c Other (itemize): 5 Expenses recorded on books this year not deducted on this return (itemize): a Depreciation b Charitable contributions c Travel and entertainment Other (itemize): 09 Add lines 7 and 8 6 Add lines 1 through 5 10 Income (page 1, line 28)-line 6 less line 9 THIS FORM Is A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2019 McGraw-Hill Education. next>
