a$.$ and b$.$ Compute HC Incorporated's current$-$year taxable income $2024$

given the following information relating to its current$-$year activities. Also, compute HC$\text{'}$s Schedule M$-1$ assuming that HC$\text{'}$s federal income tax expense for book purposes is $$30,000.$ Use Exhibit $16-7.$

Required:

Gross profit from inventory sales of $$310,000($no book$$tax differences$).$

Dividends HC received from $28$ percent$-$owned corporation of $$120,000($this is also HC$\text{'}$s pro rata share of the corporation's earnings$).$

Expenses other than DRD$,$ charitable contribution $($CC$),$ and net operating loss $($NOL$)$ are $$300,000($no book$$tax differences$).$

NOL carryover from prior year of $$12,000.$

Cash charitable contribution of $$50,000.$ a$.$ and b$.$ Compute HC Incorporated's current$-$year taxable income given the following information relating to its current$-$year activities. Also, compute $\backslash (\backslash$mathrm$\{$HC$\}^\{\backslash$prime$\}\backslash )\text{'}$s Schedule $\backslash (\backslash$mathrm$\{$M$\}-1\backslash )$ assuming that $\backslash (\backslash$mathrm$\{$HC$\}^\{\backslash$prime$\}\backslash )\text{'}$s federal income tax expense for book purposes is $\backslash (\backslash$$ $30,000\backslash ).$ Use Exhibit $16-7.$

Required:

$-$ Gross profit from inventory sales of $\backslash (\backslash$$ $310,000\backslash )($no book$-$tax differences$).$

$-$ Dividends HC received from $28$ percent$-$owned corporation of $\backslash (\backslash$$ $120,000\backslash )($this is also $\backslash (\backslash$mathrm$\{$HC$\}^\{\backslash$prime$\}\backslash )$ s pro rata share of the corporation's earnings$).$

$-$ Expenses other than DRD$,$ charitable contribution $($ CG $,$ and net operating loss $($ NOL $)$ are $\backslash$$$300,000($no book$-$tax differences$).$

$-$ NOL carryover from prior year of $\backslash (\backslash$$ $12,000\backslash ).$

$-$ Gash charitable contribution of $\backslash (\backslash$$ $50,000\backslash ).$

Complete this question by entering your answers in the tabs below.

Compute HC Incorporated's current$-$year taxable income given the following information relating to its current$-$year activities.

Note: Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline Description & Book Income $($Debit$)$ Credit & Book$-$tax adjustment $($Debit$)$ & Book$-$tax adjustments Credit & Taxable Income $($Debit$)$ Credit $\backslash \backslash$

$\backslash$hline Gross profit & & $*$ & & $\backslash \backslash$

$\backslash$hline Other income: & & & & $\backslash \backslash$

$\backslash$hline Dividend income & & & & $\backslash \backslash$

$\backslash$hline Gross Income & & $,$ & & $\backslash \backslash$

$\backslash$hline Expenses: & & & & $\backslash \backslash$

$\backslash$hline Business expenses other than DRD$,$ CC$,$ and NOL & $?$ & $?$ & & $\backslash \backslash$

$\backslash$hline Federal income tax expense & & & & $\backslash \backslash$

$\backslash$hline Total expenses before charitable contribution, NOL, and DRD deduction & & & & $\backslash \backslash$

$\backslash$hline Income before charitable contribution, NOL and DRD & & & & $\backslash \backslash$

$\backslash$hline NOL earnover from prior year & $?$ & $\backslash (\backslash$cdot $\backslash )$ & & $\backslash \backslash$

$\backslash$hline Taxable income for charitable contribution limitation purposes $($modified taxable income$)$ & & & & $\backslash \backslash$

$\backslash$hline Charitable contributions & $?$ & $?$ & & $\backslash \backslash$

$\backslash$hline Taxable income before DRD & & & & $\backslash \backslash$

$\backslash$hline Dividends received deduction $($DRD$)$ & $\backslash \%$ & & & $\backslash \backslash$

$\backslash$hline Book or Taxable income & & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Required A

Required $\backslash ($ B $\backslash )$

Compute HC$\text{'}$s Schedule M$-1$ assuming that HC$\text{'}$s federal income tax expense for book purposes is $\backslash (\backslash$$ $30,000\backslash ).$

Note: Enter all values as positive numbers.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|\}$

$\backslash$hline $\backslash$multicolumn$\{2\}\{|$l$|\}\{$ Schedule Mi$-1$: Reconciliation of Income $($Loss$)$ per Books With Income per Return $\}\backslash \backslash$

$\backslash$hline $1.$ Net income $($loss$)$ per books & $\backslash \backslash$

$\backslash$hline $2.$ Federal income tax per books & $\backslash \backslash$

$\backslash$hline $3.$ Excess of capital losses over capital gains & $\backslash \backslash$

$\backslash$hline $4.$ Income subject to tax not recorded on books this year $($itemize$)$ & $\backslash \backslash$

$\backslash$hline $5.$ Expenses recorded on books this year not deducted on this return $($itemize$)$: & $\backslash \backslash$

$\backslash$hline a$.$ Depreciation & $\backslash \backslash$

$\backslash$hline b$.$ Charitable contributions & $\backslash \backslash$

$\backslash$hline c$.$ Travel and entertainment & $\backslash \backslash$

$\backslash$hline $6.$ Total & $\backslash \backslash$

$\backslash$hline $7.$ Income recorded on books this yeat not included on this return $($itemize$)$: $\backslash \backslash$

$\backslash$hline Tax$-$exempt interest & $\backslash \backslash$

$\backslash$hline $8.$ Deductions on this return not charged against book income this year $($itemize$)$: & $\backslash \backslash$

$\backslash$hline a$.$ Depreciation & $\backslash \backslash$

$\backslash$hline b$.$ Charitable contributions & $\backslash \backslash$

$\backslash$hline $9.$ Add lines $7$ and $8$ & $\backslash \backslash$

$\backslash$hline $10.$ Income & $\backslash \backslash$

$\backslash$hline $\backslash$hline

$\backslash$end$\{$tabular$\}$