DogSubject: acounting Luong Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its financial statementsprepared in accordance with GAAP. The corporation's books and records reveal the following information:• Luong's federal income tax expense per books was $200,000.• Luong's book income included $10,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stockinterest, and $4,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest.• Luong recognized $10,000 of capital losses this year and no capital gains.Luong recorded $8,000 of book expense for meals not provided by a restaurant and $10,000 of book expense for entertainmentcosts.• Luong's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000.Required:a. Compute Luong's federal taxable income and regular tax liability.b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income.Complete this question by entering your answers in the tabs below.Required A Required BPrepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income.Note: Any Expenses (Line 5) and Deductions (Line 8) that are not included under Depreciation, Charitable Contributions, and Travel andEntertainment should be combined in the corresponding line item "Other". Enter all amounts as positive. Enter your answers in whole dollars notin millions.Schedule M-1Reconciliation of Income (Loss) per Books With Income per ReturnNote: The corporation may be required to file Schedule M-3. See instructions12 Federal income tax per books3 Excess of capital losses over capital gains4 Income subject to tax not recorded on books this year(itemize):5 Expenses recorded on books this year not deducted onthis return (itemize):a Depreciationb Charitable contributionsc Travel and entertainmentd Other (include all items)Net income (loss) per books6 Add lines 1 through 57 Income recorded on books this year not included onthis return (itemize):Tax-exempt interest08 Deductions on this return not charged against bookincome this year (itemize):a Depreciationb Charitable contributionsc Other (include all items)09 Add lines 7 and 80 10 Income (page 1, line 28) - line 6 less line 90000Show less A

Question

DogSubject: acounting Luong Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its financial statementsprepared in accordance with GAAP. The corporation's books and records reveal the following information:• Luong's federal income tax expense per books was $200,000.• Luong's book income included $10,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stockinterest, and $4,000 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest.• Luong recognized $10,000 of capital losses this year and no capital gains.Luong recorded $8,000 of book expense for meals not provided by a restaurant and $10,000 of book expense for entertainmentcosts.• Luong's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000.Required:a. Compute Luong's federal taxable income and regular tax liability.b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income.Complete this question by entering your answers in the tabs below.Required A Required BPrepare a Schedule M-1, page 6, Form 1120, reconciling Luong's book and taxable income.Note: Any Expenses (Line 5) and Deductions (Line 8) that are not included under Depreciation, Charitable Contributions, and Travel andEntertainment should be combined in the corresponding line item &#34;Other&#34;. Enter all amounts as positive. Enter your answers in whole dollars notin millions.Schedule M-1Reconciliation of Income (Loss) per Books With Income per ReturnNote: The corporation may be required to file Schedule M-3. See instructions12 Federal income tax per books3 Excess of capital losses over capital gains4 Income subject to tax not recorded on books this year(itemize):5 Expenses recorded on books this year not deducted onthis return (itemize):a Depreciationb Charitable contributionsc Travel and entertainmentd Other (include all items)Net income (loss) per books6 Add lines 1 through 57 Income recorded on books this year not included onthis return (itemize):Tax-exempt interest08 Deductions on this return not charged against bookincome this year (itemize):a Depreciationb Charitable contributionsc Other (include all items)09 Add lines 7 and 80 10 Income (page 1, line 28) - line 6 less line 90000Show less A

Accepted Answer

Luong CorporationAmount ($)Net Income after Tax         1,000,000Add:Federal Income Tax…

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