Determine Taxable Income For Business Entities Practice Test

What adjustments are needed to compute the taxable income accurately for Maple Manufacturing, Inc., a calendar-year C corporation, given: book income before tax $600,000; included in book income is $90,000 of tax-exempt municipal bond interest; book depreciation $70,000; tax depreciation (MACRS) $110,000; fines and penalties $12,000; and meals expense $20,000 (subject to 50% limit). Assume no other differences.

Which deductions are allowable for determining the entity's taxable income for Sequoia, Inc., a calendar-year C corporation, given the following payments: $22,000 federal income taxes; $45,000 state income taxes; $8,000 penalties for late filing payroll tax returns; and $30,000 compensation to officers for services. Assume all amounts were paid in 2025.