Question

The Loquat Corporation has book net income of $139,600 for the current year. included in this figure are the following items which are reported on the corporation schedule M1 reconciliation of income loss for goods within camper return.
federal income tax expense $20,940
depreciation deduction on the books which is not deductible for tax purposes 27 920
deduction for 50% of meals and entertainment expense which is not allowed for tax purposes 12,564
deduction for a tax penalty not allow for tax purposes 5584
tax-exempt interest income included in book income but not in tax income 8376
calculate loquat corporations taxable income for the current n calculate loquat corporations taxable income for the current year based on the information given

Answer 1

	Net Income of Current year as per books	$        139,600
Add:	Expenses not allowed under Income tax
	Federal income tax	$          20,940
	Depreciation	$          27,920
	Meals and entertainment expenses	$          12,564
	Tax Penalty	$            5,584
	Tax exempt interest income	$            8,376
	Taxable Income	$        214,984