Q: On prior Poll Question, (Poll #2), please go over how depreciation on Schedule M1 goes up. Thanks.
A: Depreciation expense reported on the company’s accrual income statement would remain unchanged, but now it would exceed depreciation expense reported on Schedule 1120S by an additional $20,476, since this latter amount would be removed from the original $111,303 reported on Form 1125-A and result in a Form 1125-A depreciation expense of $90,827. Thus, the Schedule M1 adjustment for depreciation would increase.
Q. “Fixed Asset spending per instructions “is that just based on Form 4562?
A: This refers to the Fixed Asset computation instructions in the Exercise.
Ccourse overview: Business Income Tax Returns and Ratio Analysis