Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for the current year and asks you to prepare Schedule M-1. Net income per books (after-tax) $258,050 Taxable income 195,000 Federal income tax liability 40,950 Interest income from tax-exempt bonds 5,000 Interest paid on loan incurred to purchase tax-exempt bonds 2,000 Life insurance proceeds received as a result of death of Heron’s president 100,000 Premiums paid on policy on life of Heron’s president 4,500 Excess of capital losses over capital gains 2,000 Retained earnings at beginning of year 375,000 Cash dividends paid 90,000 Tax depreciation in excess of book depreciation 7,500
Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for the current year and asks you to prepare Schedule M-1. Net income per books (after-tax) $258,050 Taxable income 195,000 Federal income tax liability 40,950 Interest income from tax-exempt bonds 5,000 Interest paid on loan incurred to purchase tax-exempt bonds 2,000 Life insurance proceeds received as a result of death of Heron’s president 100,000 Premiums paid on policy on life of Heron’s president 4,500 Excess of capital losses over capital gains 2,000 Retained earnings at beginning of year 375,000 Cash dividends paid 90,000 Tax depreciation in excess of book depreciation 7,500
Chapter6: Accounting Periods And Other Taxes
Section: Chapter Questions
Problem 7MCQ: B Corporation, a calendar year-end, accrual basis taxpayer, is owned 75 percent by Bonnie, a cash...
Related questions
Question
Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for the current year and asks you to prepare Schedule M-1.
|
Net income per books (after-tax) |
$258,050 |
|
Taxable income |
195,000 |
|
Federal income tax liability |
40,950 |
|
Interest income from tax-exempt bonds |
5,000 |
|
Interest paid on loan incurred to purchase tax-exempt bonds |
2,000 |
|
Life insurance proceeds received as a result of death of Heron’s president |
100,000 |
|
Premiums paid on policy on life of Heron’s president |
4,500 |
|
Excess of capital losses over |
2,000 |
|
|
375,000 |
|
Cash dividends paid |
90,000 |
|
Tax |
7,500 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT