Prepare an M-1 reconciliation for MDC Corporation (for tax year 2018) using the following data: Net income per books (after tax)

500,000

Federal income tax per books

150,000

Excess of capital losses over capital gains

100,000

Dividend income (MDC owns 1% of the paying corporation)

150,000

Marketing expense

80,000

Entertainment expense (total amount)

68,000

Tax-exempt interest income (private activity bond)

9,000

Book (GAAP) depreciation in excess of tax (MACRS) deprecation

150,000

             M-1 reconciliation for MDC Corporation

Net income per books (after tax)                                       $500,000

Add: Item that decreased net income

but did not affect taxable income

Federal income tax per books                      $150,000

Excess of capital losses over capital gains  $100,000

Marketing expense                                        $80,000

Entertainment expense                                 $68,000

Book (GAAP) depreciation in excess            $150,000     $548,000

of tax (MACRS) deprecation

Less: Items that increased net income per

books but did not affect taxable income

Dividend income                                             $150,000

Tax-exempt interest                                        $9,000       $159,000

Taxable Income                                                                    $889,000

answer; i believe the correct answer is (4.0);