CHAPTER 16 Corporate Operations 16-39 56. Compute HC Inc.'s current-year taxable income given the following information relating to its 2019 activities. Also, compute HC's Schedule M-1 assuming that...

56. Compute HC Inc.’s current-year taxable income given the following information relating to its 2019 activities. Also, compute HC’s Schedule M-1 assuming that HC’s federal income tax expense for book purposes is $30,000.

Extracted text: CHAPTER 16 Corporate Operations 16-39 56. Compute HC Inc.'s current-year taxable income given the following information relating to its 2019 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.