Use the following information to complete Schedule M-1 (Form 1120) for ADZ Corporation. ADZ net income per
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Use the following information to complete Schedule M-1 (Form 1120) for ADZ Corporation.
| ADZ net income per books | $350,485 |
| Federal income taxes | 98,389 |
| Excess of capital losses over capital gains | 3,867 |
| Income subject to tax not recorded on books this year | 15,000 |
| Expenses recorded on books not deducted on the tax return. Travel and entertainment expenses (nondeductible portion)Life insurance premiums Charitable contributions | 5,720 10,150 7,600 |
| Income recorded on books not included on the tax return. Tax-exempt interest Life insurance proceedsInstallment sales | 5,875 175,000 9,757 |
| Deductions on return not charged against book income this year Depreciation Pre-paid advertising | 26,502 2,500 |
| ADZ taxable income | 271,577 |
Answer the following question based on the scenario in Learning Activity 3. What is the amount of the owner's equity account for Patrick at year-end?
a) $38,000
b) $53,000
c) $63,000
d) $39,000
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