Problem $11-12($Algo$)[$LO $11-3,11-4]$

Luong Corporation, a calendar year, accrual basis corporation, reported $$1\mathrm{.}60$ million of net income after tax on its financial statements prepared in accordance with GAAP. The corporation$$s books and records reveal the following information:

Luong's federal income tax expense per books was $$212,000.$

Luong's book income included $$22,000$ of dividends received from a domestic corporation in which Luong owns a $25$ percent stock interest, and $$10,000$ of dividends from a domestic corporation in which Luong owns a $5$ percent stock interest.

Luong recognized $$22,000$ of capital losses this year and no capital gains.

Luong recorded $$14,000$ of book expense for meals not provided by a restaurant and $$16,000$ of book expense for entertainment costs.

Luong's depreciation expense for book purposes totaled $$412,000.$ MACRS depreciation was $$475,000.$

Required:

Compute Luong's federal taxable income and regular tax liability.

Prepare a Schedule M$-1,$ page $6,$ Form $1120,$ reconciling Luong$$s book and taxable income.