For 2012, Permtemp reported the following book income statement and balance sheet, excluding the federal
For 2012, Permtemp reported the following book income statement and balance sheet,
excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities:
Sales $33,000,000
Cost of goods sold )
Gross profit $11,000,000
Dividend income 55,000
Tax-exempt interest income
Total income $11,070,000
Expenses:
Depreciation $ 800,000
Bad debts 625,000
Charitable contributions 40,000
Interest 455,000
Meals and entertainment 60,000
Other
Total expenses )
Net income before federal income taxes
Cash $ 2,125,000
Accounts receivable $ 3,300,000
Allowance for doubtful accounts ) 2,850,000
Inventory 6,000,000
Fixed assets $10,000,000
Accumulated depreciation ) 8,400,000
Investment in corporate stock 1,000,000
Investment in tax-exempt bonds
Total assets
Accounts payable $ 2,120,000
Long-term debt 8,500,000
Common stock 6,000,000
Retained earnings
Additional information for 2012:
Depreciation for tax purposes is $2.45 million under MACRS.
Bad debt expense for tax purposes is $425,000 under the direct writeoff method.
Qualified production activities income is $3 million.
Required for 2012:
a. Prepare page 1 of the 2012 Form 1120, computing the corporation s taxable income
and tax liability.
Also help figuring out schedule C, L, M-2, & M-3
included 2011 pg 1 if it is needed.
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Rating:
5/
Solution: For 2012, Permtemp reported the following book income statement and balance sheet, excluding the federal