Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,518,150. Timpanogos provided the following information relating to its 2022 activities: Life insurance proceeds as a result of CEO's death $ 226,000 Revenue from sales (for both book and tax purposes) 2,260,000 Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 23,600 Charitable contributions 203,400 Cost of goods sold for book and tax purposes 339,000 Interest income on tax-exempt bonds 45,200 Interest paid on loan obtained to purchase tax-exempt bonds 50,850 Rental income payments received and earned in 2022 17,600 Rental income payments received in 2021 but earned in 2022 11,300 Rental income payments received in 2022 but not earned by year-end 33,900 Tax depreciation 61,500 Book Depreciation 27,600 Net capital loss 47,200 Federal income tax expense for books in 2022 350,300 Required: Reconcile book income to taxable income for Timpanogos Incorporated. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income. Identify each book-tax difference as either permanent (P) or temporary (T). Complete Schedule M-1 for Timpanogos. Compute Timpanogos Incorporated's tax liability.

 

Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income aftertaxes of $1,518,150. Timpanogos provided the following information relating to its 2022 activities:Life insurance proceeds as a result of CEO's deathRevenue from sales (for both book and tax purposes)$ 226,000Charitable contribuPremiums paid on the key-person life insurance policies. The policies have no cash surrender value.2, 260, 09023 , 600Cost of goods sold for book and tax purposes203, 400Interest income on tax-exempt bonds339, 090Interest paid on loan obtained to purchase tax-exempt bonds45 , 208Rental income payments received and earned in 202250 , 850Rental income payments received in 2021 but earned in 202217, 600Rental income payments received in 2022 but not earned by year-endTax depreciation35,980Book Depreciation51,580Net capital lossFederal income tax expense for books in 202247, 200350,300Required. Reconcile book income to taxable income for Timpanogos Incorporated. Be sure to start with book income and identify all of theadjustments necessary to arrive at taxable income.b. Identify each book-tax difference as either permanent (P) or temporary (T).c. Complete Schedule M-1 for Timpanogosd. Compute Timpanogos Incorporated's tax liability.DescriptionBook IncomeBook-taxPermanent (P) or Book-tax(Dr) Cradjustments(Dr)Temporary (T)adjustments Permanent (P) orTaxableCrTemporary (T] Income (Dr) CrRevenue from sales$ 2,260,000Cost of goods soldo$ 2,260 000(339,(100)ofGross profit(339 000)$ 1,921,000Other income:S 1,921,000Life insurance proceeds from CEO's death226,000(226,000)Interest income on tax-exempt bonds45,20045,200)Rental Income.28 400(11,300)33,900Giuss incomeS$ 2,221, 100S 1,972 500Expenses:Interest paid to obtain tax-exempt bonds(50.850)50,850Net capital loss(47 200)47,200Depreciation27,600)(33,900)(61,500)(23,600)(61,500)23,600 FFederal income tax expense(350,300)Total expenses before chantable contribution, NOL, and DRD350,300(499,550)Income before charitable contribution, NOL, and DRD(61,500)$ 1,721,550S 1,922 300NO_ carryover from prior yearTaxable income for charitable contribution limitation purposesCharitable contributions (after 109% limit)S 1,$22 300(03,400)Book/Taxable income(191,40()$ 1,518, 150 $ (316,400)$ 505,05$ 1,730,900