Camden Corporation, a calendar year accrual basis corporation, reported $5 mil-lion of net income after tax on its financial statements prepared in accordance with GAAP. In addition, the following information is available from Camden’s books and records: • Federal income tax expense per books was $2 million.
• Camden incurred $30,000 of meals and entertainment expenses. • Camden sold two pieces of equipment used in its business for total sales proceeds of $400,000. The equipment’s original cost was $2 million. Book depreciation prior to sale totaled $1.2 million; tax depreciation totaled $1.5 million.
• Camden uses the reserve method of accounting for bad debts. Additions to the re-serve during the year totaled $400,000. Accounts receivable actually written off during the year totaled $450,000.
• Camden’s depreciation expense for book purposes totaled $900,000. Tax depreciation computed under MACRS is $1.2 million.
a. Determine Camden’s taxable income and complete Schedule M-1, page 5, Form 1120.
b. For the current year, Camden has AMT preferences and positive AMT adjustments totaling $2 million. Calculate Camden’s alternative minimum taxable income, tentative minimum tax, regular tax before credits, and final tax due.

  • CreatedNovember 03, 2015
  • Files Included
Post your question