"84. Compute MV Corp.'s 2015 taxable income given the following information relating to its year 1 activities. Also, compute MV's Schedule M-1 assuming that MV's federal income tax expense for book purposes is $100,000.
• Gross profit from inventory sales of $500,000 (no book-tax differences).
• Dividends MV received from 25percent-owned corporation of $100,000 (assume this is also MV's pro rata share of the distributing corporation's earnings).
• Expenses other than DRD, charitable contribution (CC), net operating loss (NOL), and domestic production activities deduction (DPAD) are $350,000 (no book-tax differences).
• NOL carryover from prior year of $10,000.
• Cash charitable contribution of $120,000.
• Domestic production activities deduction of $5,000 (wage limitation does not apply)."
(Ayers 5-54)
Ayers, Benjamin, Connie Weaver, Brian Spilker, Ronald Worsham, John Robinson, Edmund Outslay, John B. McGraw-Hill's Taxation of Business Entities, 2016 Edition, 7th Edition. McGraw-Hill Higher Education, 20150501. VitalBook file.
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