FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Heron Corporation, a calendar year, accrual basis taxpayer,
provides the following information for this year and asks you
to prepare Schedule M-1.
Net income per books (after-tax)
$239,700
Taxable income
195,000
Federal income tax liability
59,300
Interest income from tax-exempt bonds
5,000
Interest paid on loan incurred to purchase tax-
2,000
exempt bonds
Life insurance proceeds received as a result of 100,000
death of Heron's president
Premiums paid on policy on life of Heron's
4,500
president
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
7,500
depreciation
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Transcribed Image Text:Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for this year and asks you to prepare Schedule M-1. Net income per books (after-tax) $239,700 Taxable income 195,000 Federal income tax liability 59,300 Interest income from tax-exempt bonds 5,000 Interest paid on loan incurred to purchase tax- 2,000 exempt bonds Life insurance proceeds received as a result of 100,000 death of Heron's president Premiums paid on policy on life of Heron's 4,500 president 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 7,500 depreciation
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