McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 29

Compute MV, Corp.s 2011 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 25 percent 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 carryforward from prior year of $10,000.•?Cash charitable contribution of $120,000.•?Domestic production activities deduction of $5,000 (wage limitation does not apply).