(Solution Download) 1 Identify the correct answer about the purposes of Schedules


1. Identify the correct answer about the purposes of Schedules M-1 and M-3.

2. Kelsey Corp. is an accrual-basis, calendar-year domestic corporation which is not part of a consolidated group. In the current tax year, Kelsey recorded over $10 million in gross receipts and ended the year with $9 million in total assets. Which reconciliation schedule-M-1 or M-3-should Kelsey file along with its corporate tax return for the current year?
a. Only Schedule M-1 can be filed.
b. Schedule M-3 is required.
c. Depends on how many years the corporation has been in existence.
3. Indicate for each of the following financial statement items whether it would cause no adjustment or whether its absolute value would be either added to or subtracted from net income per books when computing taxable income on the Schedule M-1.
4. Indicate for each of the following financial statement items whether it would cause no adjustment or whether its absolute value would be either added to or subtracted from net income per books when computing taxable income on the Schedule M-1.
5. Kookaburra Corp. reports net income per books of $575,000 for the current tax year.
Included in this amount are the following items.
Depreciation reported on the current year tax return is $40,000.
Considering only the above information, what is Kookaburra Corp.'s taxable income for the current tax year?
a. $655,000
b. $650,000
c. $640,000

 







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