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Otrada [13]
3 years ago
11

Media Corp. is an accrual-basis, calendar-year C corporation. Its reported book income included $6,000 in municipal bond interes

t 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)
Business
1 answer:
Strike441 [17]3 years ago
5 0

Answer:

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

Explanation:

Given data:

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

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