In Completing a Schedule M-1 of Form 1120, the Federal

question 137

Essay

In completing a Schedule M-1 of Form 1120, the Federal income tax per books is added to net income per books to arrive at taxable income. Why?

---

Definitions:

Returns To Scale

A concept in economics that describes the change in output as a result of a proportional change in all inputs.

Input

Resources used in the production process, including labor, materials, and capital.

Production Function

A production function describes the relationship between inputs utilized in production and the output generated from those inputs.

Returns To Scale

The rate at which production output increases as a result of a proportional increase in all inputs (labor, capital, etc.).