1-24 Schedule M-3. Indicate whether the following statements regarding the

Schedule M-3 are true or false and if false, explain why.

1. A corporation can file Schedule M-3 or alternatively use Schedule M-2.
2. Only publicly traded companies are required to file Schedule M-3.
3. One of the alleged defects of the M-1 concerns the source of the book in-come number used in the reconciliation.
4. Corporations that are required to use the M-3 must complete SEC Form 10-K and use the financial statement income reported on such form in completing the reconciliation between book income and taxable income.
5. Reporting the actual book-tax differences on the M-3 is identical to that for the M-1 except the M-3 identifies about 70 specific items that must be reported while the M-1 reports about 10.
6. In the first year that a corporation files the M-3, it need not report the book and tax numbers but only the differences and whether they are permanent or temporary.
7. Filing of the M-3 satisfies the reportable transaction requirement.