Question

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

Answer 1

Answer:

-$4,500

Explanation:

The computation of the Media's net M-1 adjustment is given below:

= Expense included in interest that incurred on indebtness - book income reported

= $1,500 - $6,000

= -$4,500

Hence, the Media's net M-1 adjustment is -$4,500

The same should be considered and relevant

Therefore we ignored $8,000