Ask Question
18 February, 06:10

Media Corp. is an accrual-basis, calendar-year C corporation. Its reported book income included $6,000 in municipal bond interest income. Its expenses included $1,500 of interest incurred on indebtedness used to carry municipal bonds and $8,000 in advertising expense. What is Media's net M-1 adjustment on its Form 1120, U. S. Corporation Income Tax Return, to reconcile to its taxable income?

(A) $1,500

(B) $3,500

(C) $9,500

(D) $ (4,500)

+3
Answers (1)
  1. 18 February, 07:06
    0
    Media's net M-1 adjustment to reconcile to its taxable income is $4500

    Explanation:

    Given dа ta:

    Interest income = $6000

    The amount of expenses on indebtedness = $1500

    Advertising expenses = $8000

    Media's net M-1 adjustment is calculated as

    M-1 adjustment = interest income - The amount of expenses on indebtedness

    M-1 adjustment = $6000 - $1500

    M-1 adjustment = $4500

    Media's net M-1 adjustment to reconcile to its taxable income is $4500
Know the Answer?