This week we will expand upon last weeks M-1 Assignment. Below are the M-1 items for Purple Corp for 2020.

You need to complete the Schedule M-1 (attached) and uploaded it to Blackboard

It might be easier to use the excel spreadsheet from last week first and then transfer the numbers to Schedule M-1. I'll give you a hint - Taxable income should be $398,800

The following information for 2020 relates to Purple Corp, a calendar year, accrual method taxpayer.

Net Income per books (after-tax) $250,000 Federal income tax per books 122,250 Depreciation (amount deducted on GAAP financial statements) 145,000 Depreciation (amount calculated for tax purposes under MACRS) 130,000 Fine for Speeding tickets 6,250 Amortization (GAAP) 0 Amortization (Tax) 10,750 Country Club Dues 11,000 Accrued Vacation not deducted on 12/31/19 Return 15,000 Accrued Vacation @ 12/31/20 (7,500 paid by 3/15/21) 25,000 Allowance for Bad Debts on Balance Sheet @ 12/31/19 13,200 Allowance for Bad Debts on Balance Sheet @ 12/31/20 15,750

Based on the above information, use Schedule M-1 (on page 6 of Form 1120) for Purple Corp. and upload the Schedule M-1