Facts: The following income and expense accounts appeared in the accounting records of Rocket Corporation, an accrual basis taxpayer, for the calendar year 2022. Book Income Account Title Debit Credit Net Sales $ 3,000,000 Dividends 8,000 (1) Interest 18,000 (2) Gain on sale of stock 5,000 (3) Key-person life insurance proceeds 100,000 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 60,000 (7) Other expenses 40,000 (8) Federal income taxes 96,000 Net income 298,000 - 0 - Total $ 3,131,000 $ 3,131,000 The following additional information applies: 1. Dividends were from Star Corporation, a 30%-owned domestic corporation. 2. Interest revenue consists of interest on corporate bonds, $15,000; and municipal bonds, $3,000. 3. The stock is a capital asset held for three years prior to sale. 4. Rocket Corporation uses the allowance method of accounting for bad debt. The corporation added $13,000 to the reserve this year. Actual bad debts written off totaled $12,000. 5. Interest expense consists of $11,000 interest incurred on funds borrowed for working capital, and $1,000 interest on funds borrowed to purchase municipal bonds. 6. All contributions were paid in cash during the current year to State University. The corporation did not make the election to use the 25% limit on deducting charitable contributions. 7. Depreciation per books is calculated using the straight-line method. For income tax purposes, depreciation amounted to $85,000. 8. Other expenses include premiums of $5,000 on the key-person life insurance policy covering Rocket Corporations president, who died in December. Required: (1) Reconcile Rocket Corporations book income with its taxable income (before special deductions) (2) Complete Schedule M-1 for Rocket Corporation based on the information provided