50 of the 50000 meals and entertainment expenses are

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Unformatted text preview: 21 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 Choice "d" is incorrect. The additional $2,000 must be included in income in 1993. The 25% rule cited pertains to unintentional underreporting of income and its effect on the statute of limitations, increasing it from 3 to 6 years. CPA-02139 Type1 M/C A-D Corr Ans: A PM#65 R 3-01 48. CPA-02139 PII Nov 93 #42 Page 25 In 19X2, Cape Co. reported book income of $140,000. Included in that amount was $50,000 for meals and entertainment expense and $40,000 for federal income tax expense. In Cape's Schedule M-1 of Form 1120, which reconciles book income and taxable income, what amount should be reported as taxable income? a. b. c. d. $205,000 $190,000 $150,000 $140,000 CPA-02139 Explanation Choice "a" is correct. The M-1 reconciliation of book income to taxable income would be as follows: Book income Federal income tax expense deductible from book income, but n...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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