Accounting : Emerald Corporation, a calendar year and accrual method taxpayer

Subject: Business    / Accounting
Question

Emerald Corporation, a calendar year and accrual method taxpayer, provides the following information and asks you to prepare Schedule M–1 for 2015:

Net income per books (after-tax) $257,950

Federal income tax per books 41,750

Tax-exempt interest income 15,000

Life insurance proceeds received

as a result of death of corporate president 150,000

Interest on loan to purchase tax-exempt bonds 1,500

Excess of capital loss over capital gains 6000

Premiums paid on life insurance policy on life

of Emerald’s president 7800