Compute HC Inc.’s current year taxable income given the following information relating to its 2018 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) 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.