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Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 11, Problem 12AP
Cramer Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its 2019 financial statements prepared in accordance with GAAP. The corporation’s books and records reveal the following information:
- Cramer’s federal income tax expense per books was $200,000.
- Cramer’s book income included $10,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent stock interest, and $4,000 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.
- Cramer recognized $10,000 of capital losses this year and no
capital gains. - Cramer recorded $8,000 of book expense for meals and $10,000 of book expense for entertainment costs.
- Cramer’s
depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000.
- a. Compute Cramer’s federal taxable income and regular tax liability.
- b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer’s book and taxable income.
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Students have asked these similar questions
Cramer Corporation, a calendar year, accrual
basis corporation, reported $1 million of net
income after tax on its 2020 financial
statements prepared in accordance with
GAAP. The corporation's books and records
reveal the following information: Cramer's
federal income tax expense per books was
$200,000. Cramer's book income included
$10,000 of dividends received from a
domestic corporation in which Cramer owns a
25 percent stock interest, and $4,000 of
dividends from a domestic corporation in
which Cramer owns a 5 percent stock interest.
Cramer recognized $10,000 of capital losses
this year and no capital gains. Cramer
recorded $8,000 of book expense for meals
and $10,000 of book expense for
entertainment costs. Cramer's depreciation
expense for book purposes totaled $400,000.
MACRS depreciation was $475,000. Required:
Compute Cramer's federal taxable income
and regular tax liability. Prepare a Schedule
M-1, page 6, Form 1120, reconciling Cramer's
book and taxable income.
Luong Corporation, a calendar year, accrual basis corporation, reported $1.15 million of net income after
tax on its financial statements prepared in accordance with GAAP. The corporation's books and records
reveal the following information:
• Luong's federal income tax expense per books was $203,000.
• Luong's book income included $13,000 of dividends received from a domestic corporation in which
Luong owns a 25 percent stock interest, and $5,500 of dividends from a domestic corporation in
which Luong owns a 5 percent stock interest.
Luong recognized $13,000 of capital losses this year and no capital gains.
• Luong recorded $9,600 of book expense for meals not provided by a restaurant and $11,500 of book
expense for entertainment costs.
• Luong's depreciation expense for book purposes totaled $403,000. 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…
Cramer Corporation, a calendar year, accrual basis corporation, reported $1.25 million of net income after tax on its 2020 financial
statements prepared in accordance with GAAP. The corporation's books and records reveal the following information:
.
.
Cramer's federal income tax expense per books was $205,000.
Cramer's book income included $15,000 of dividends received from a domestic corporation in which Cramer owns a 25 percent
stock interest, and $6,500 of dividends from a domestic corporation in which Cramer owns a 5 percent stock interest.
Cramer recognized $15,000 of capital losses this year and no capital gains.
.
. Cramer recorded $10,600 of book expense for meals and $12.500 of book expense for entertainment costs.
. Cramer's depreciation expense for book purposes totaled $405,000. MACRS depreciation was $475,000.
Required:
a. Compute Cramer's federal taxable income and regular tax liability.
b. Prepare a Schedule M-1, page 6, Form 1120, reconciling Cramer's book and taxable…
Chapter 11 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 11 - Prob. 1QPDCh. 11 - Prob. 2QPDCh. 11 - Prob. 3QPDCh. 11 - Prob. 4QPDCh. 11 - Prob. 5QPDCh. 11 - Libretto Corporation owns a national chain of...Ch. 11 - Prob. 7QPDCh. 11 - Prob. 8QPDCh. 11 - Prob. 9QPDCh. 11 - In your own words, explain the conclusion that...
Ch. 11 - Prob. 1APCh. 11 - Prob. 2APCh. 11 - Corporation P owns 93 percent of the outstanding...Ch. 11 - This year, Napa Corporation received the following...Ch. 11 - This year, GHJ Inc. received the following...Ch. 11 - In its first year, Camco Inc. generated a 92,000...Ch. 11 - Prob. 7APCh. 11 - Prob. 8APCh. 11 - Cranberry Corporation has 3,240,000 of current...Ch. 11 - Hallick Inc. has a fiscal year ending June 30....Ch. 11 - Landover Corporation is looking for a larger...Ch. 11 - Cramer Corporation, a calendar year, accrual basis...Ch. 11 - Prob. 13APCh. 11 - Prob. 14APCh. 11 - Prob. 15APCh. 11 - Prob. 16APCh. 11 - In each of the following cases, compute the...Ch. 11 - Prob. 18APCh. 11 - Prob. 19APCh. 11 - Jackson Corporation has accumulated minimum tax...Ch. 11 - Camden Corporation, a calendar year accrual basis...Ch. 11 - Callen Inc. has accumulated minimum tax credits of...Ch. 11 - Prob. 23APCh. 11 - Prob. 24APCh. 11 - In 2018, NB Inc.s federal taxable income was...Ch. 11 - James, who is in the 35 percent marginal tax...Ch. 11 - Leona, whose marginal tax rate on ordinary income...Ch. 11 - Prob. 28APCh. 11 - Prob. 29APCh. 11 - Prob. 30APCh. 11 - Prob. 1IRPCh. 11 - Prob. 2IRPCh. 11 - Prob. 3IRPCh. 11 - Prob. 4IRPCh. 11 - Prob. 5IRPCh. 11 - Prob. 6IRPCh. 11 - Prob. 7IRPCh. 11 - Prob. 8IRPCh. 11 - Prob. 1RPCh. 11 - Prob. 2RPCh. 11 - Prob. 3RPCh. 11 - This year, Prewer Inc. received a 160,000 dividend...Ch. 11 - Prob. 1TPCCh. 11 - Prob. 2TPC
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- Grevilla Corporation is a manufacturing company. The corporation has accumulated earnings of $950,000, and it can establish reasonable needs for $400,000 of that amount. Calculate the amount of the accumulated earnings tax (if any) that Grevilla Corporation is subject to for this year. $_____________arrow_forwardIn the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.arrow_forwardQuince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation's income tax liability for 2019 before tax credits. $________________arrow_forward
- Gosling, Inc., a calendar year, accrual basis corporation, reported $756,000 net income after tax on its financial statements prepared in accordance with GAAP. The corporation's financial records reveal the following information: Gosling earned $3,500 on an investment in tax-exempt municipal bonds. Gosling received an advance payment of rent this year for $25,000. This amount was not included in book income. Gosling's depreciation expense per books was $72,000, and its MACRS depreciation deduction was $105,000. Gosling recorded $58,000 of business meals and $27,000 of entertainment expense for book purposes. Gosling's federal income tax expense per books was $220,000. a. Compute Gosling's taxable income and regular tax liability. b. Prepare a Schedule M-1, page 5, Form 1120, reconciling Gosling's book and taxable income.arrow_forwardLuong Corporation, a calendar year, accrual basis corporation, reported $1.65 million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation's books and records reveal the following information: • Luong's federal income tax expense per books was $213,000. • Luong's book income included $23,000 of dividends received from a domestic corporation in which Luong owns a 25 percent stock interest, and $10,500 of dividends from a domestic corporation in which Luong owns a 5 percent stock interest. • Luong recognized $23,000 of capital losses this year and no capital gains. • Luong recorded $14,600 of book expense for meals not provided by a restaurant and $16,500 of book expense for entertainment costs. • Luong's depreciation expense for book purposes totaled $413,000. 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…arrow_forwarduong Corporation, a calendar year, accrual basis corporation, reported $1 million of net income after tax on its financial statements prepared 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 stock interest, 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 entertainment costs. Luong's depreciation expense for book purposes totaled $400,000. MACRS depreciation was $475,000. Required: Compute Luong's federal taxable income and regular tax liability.arrow_forward
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