You are in the process of preparing the federal and state (Virginia) income tax returns for your C Corporation client, Bravo Corporation (the Company) for the year ended December 31, 2023. The Company's trial balance follows.

Page 13 of 15 In a lunch meeting with the Company's controller, you gather/confirm the following additional information. All the Company's equipment and its aircraft are fully depreciated for both financial and tax purposes. The Company did not make any estimated tax payments during 2023. There are NO permanent differences. During 2023, the Company changed the ownership of the aircraft from Bravo Corporation to Jimmy Jones, the Company's sole shareholder. The controller thinks this may have been done for insurance purposes because just prior to this ownership change the aircraft was appraised for $220,000. As of December 31, 2022, the Company had accumulated earnings and profits of $1,000,000 and Jimmy Jones' basis in the Bravo Corporation stock is $500,000. Required 1. Calculate the Company's taxable income for the year 2023. BravoCorporation Trial Balance 12.31.23 Debits Credits Cash 645,000 Accounts receivable 200,000 Prepaid insurance 5,000 Equipment 400,000 Accumulated depreciation equipment 400,000 Aircraft 200,000 Aircraft accumulated depreciation 200,000 Accounts payable 100,000 Note payable bank 200,000 Common stock 50,000 Retained earnings 1,000,000 Revenues 6,000,000 Expenses 6,500,000 7,950,000 7,950,000

Page 14 of 15 2. Complete schedule M-2 of the 2023 version of IRS form 1120