Converting Book Income to Taxable Income. The following income and expense accounts appeared in the accounting records of Rocket Corporation, an accrual basis taxpayer, for the current calendar year. Book Income These are all Credits Net Sales $3,230,000 Dividends 10,000 (1) Interest 18,000 (2) Gain on Sale of stock 9,000 (3) Key-person life insurance proceeds 100,000 These are all debits Cost of goods sold $2,000,000 Salaries and wages $500,000 Bad Debts 13,000 (4) Payroll Taxes 62,000 Interest Expense 12,000 (5) Charitable Contributions 50,000 (6) Depreciation 70,000 (7) Other expenses 40,000 (8) Federal Income Taxes 168,000 Net Income 452,000 Total Debits $3,367,000 Total Credits $3,367,000 The following additional information applies. 1. Dividends were from Star Corporation, a 15%-owned domestic corporation 2. Interest revenue consists of interest on corporate bonds, $15,000 and municipal bonds;$3,000 3. Stock is a capital asset held for three years prior to sale 4. The Allowance for Doubtful Accounts was $0 at the end of the prior year, and $8,000 at the end of the current year. The company changed its method of accounting from the specific write-off method in the prior year to the allowance method in the current year. 5. Interest expenses consists of $11,000 interest incurred on funds borrowed for working capital and $1,000 interest on funds borrowed to purchase municipal bonds. 6. Charitable contributions in the current year are comprised of $40,000 to State University and $10,000 to Alex Ampadu for President. 7. Rocket calculated depreciation per books using the straight-line method. For income tax purposes, depreciation amount to $95,000 8. Other expenses included premiums of $5,000 on the key-person life insurance policy covering Rocket's president who died in December 9. Rocket has a $90,000 NOL carryover from prior years and a $12,000 capital loss carryover from the prior year. 10. Rocket has a $90,000 NOL carryover from prior years. Required: Prepare a worksheet reconciling Rocket's book with its taxable income (before special deductions) Six columns should be used-two( one debit and one credit). For each of the three major headings book income, schedule M-1 Adjustments and taxable income. Assume state taxes do not apply.