Schedule M-1: Reconciliation of income (Loss) per books with Income per Return.

1. Net Income (loss) per books: 450,182 Net Income per books:
2. Federal Income Tax per books: 240,550 Add: Actual federal inco
3. Excess of Capital losses over cap gains: 2,000 Over accrual of Federal
4. Income Subject to tax not recorded on books this year: Travel & Entertainment
5. Expenses recorded on books this year, not deducted on this return: Insurrance premium
a. Depreciation: Bad Debt
b. Charitable Contributions Rental
c. Travel & Entertainment: 5,000 Tax underpaymant pen
d. Life insurrance premium 10,000
e. bad Debt 4,000 Less: Excess depreciatio
f.rental 6,000 Dividen
g. tax underpayment penalty 3,268 Taxable income
28,268
6. Add lines 1-5: 721,000

7. Income recorded on books this year but not included on this return.
a. Tax exempt interest:
b. Other: Itemize

8. Deductions on this return not charged against book income this year.
a. Depreciation: 10,000
b. Charitable Contributions:
c. Other (Itemize): 3,500
13,500
9. Add lines 7 and 8: 13,500
10. Income - line 6 less line 9: 707,500

Underpayment Penalty Statement

Event Date Amount Due Amount Paid Balance Due Percent

Amount Due 4/15/2012 60,136 60136 6%
Payment 4/15/2012 37500 22636 6%

Amount Due 6/15/2012 60138 82774 6%

Payment 6/15/2012 37500 45274 6%

Amount Due 9/15/2012 60138 105412 6%

Payment 9/15/2012 37500 67912 6%

Amount Due 12/15/2012 60138 128050 6%

Payment 12/15/2012 37500 90550 6%

Date Filed 3/15/2013 90550

Total
The underpayment tax penalty rate is assumed to be 6%
 Tax provision calculations
Net Income per books: 450,182
Add: Actual federal income tax 240,550
Over accrual of Federal income tax 2,000
Travel & Entertainment 5,000
Insurrance premium 10,000
Bad Debt 4,000
Rental 6,000
Tax underpaymant penalty 3,268
270,818
Less: Excess depreciation -10,000
Dividend -3,500 -13,500
Taxable income 707,500

# of days Penalty
0
61 227

0
92 685

0
91 1016

0
90 1340

3268