Compute HC Inc.'s current year taxable income given the following information relating to its 2015 activities. Also, compute HC's Schedule M-1 assuming that HC's federal income tax expense for book purposes is $30,000.
• Gross profit from inventory sales of $310,000 (no book-tax differences).
• Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC's pro rata share of the corporation's earnings).
• Expenses other than DRD, charitable contribution (CC), net operating loss (NOL), and domestic production activities deduction (DPAD) are $300,000 (no book-tax differences).
• NOL carryover from prior year of $12,000.
• Cash charitable contribution of $50,000.
• Domestic production activities deduction of $4,000 (wage limitation does not apply).