Question

ToberRing, Inc is a U.S. retailer that uses the accrual method.  They reported the following financial accounting operating results on their GAAP financials:

Book		Adjustments	Tax Return
Sales	1,550,000
Cost of goods sold	(650,000)
Dividend from a 40% owned corporation	205,000
Net long-term capital gains	50,000
Short term capital losses	(55,000)
Interest from State of Oklahoma bonds	50,000
Interest from Corporate Bonds	25,000
Total income
Salaries and wages	520,000
Repairs	25,000
Bad debts	10,000
Advertising	20,000
Depreciation	80,000
Charitable Contributions	85,000
Meals	15,000
Total expenses
Book income before taxes
Tax Expense per books
Net Income per books
Consider the following: MACRS depreciation was $65,400 They actually wrote off $9,000 in bad debts
See the next page for the Tax Return Final computations
Total Income per the Tax return (line 11)
Total deductions on the tax return (line 27)
Taxable income before ….(line 28)
DRD
Taxable income per tax return (line 30)
Tax per the return (line 31)

1. Don’t forget permanent differences including the DRD.

2. Don’t forget to calculate the charitable contribution limit for the tax return