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Unformatted text preview: Corporation Income Tax Return to reconcile book
income to taxable income?
d. Cash distributions to shareholders.
Premiums paid on key-person life insurance policy.
Corporate bond interest.
Ending balance of retained earnings. CPA-05301
Choice "b" is correct. The Schedule M-1 reports the reconciliation of income (loss) per books to income
(loss) per the tax return. [Note: It reports both permanent and temporary differences that are discussed in
the Financial textbook for deferred taxes.]. Items that are included on this schedule are those that are (1)
reported as income for book purposes but not for tax purposes; (2) reported as an expense for book
purposes but not for tax purposes; (3) reported as taxable income for tax purposes but not as income for
book purposes; and (4) reported as deductible for tax purposes but not as an expense for book purposes.
The only option above that falls into one of these four categories is option b. Premiums paid on a keyperson life insurance policy are proper GAAP expenses f...
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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.
- Fall '10
- The Land