Identify 14 permanent and temporary diffences. Determine Federal taxes and deffered tax asset.

On January 1, 2020, Reed Enterprises, Inc., was formed to manufacture and sell Sports Memorabilia. In the current year 2022, the went Public and now is listed on the NASDAQ (Ticker Symbol REIC) is summarized as follows: Reed Enterprises, Inc.'s business address is 1010 Northeast Parkway, Irvine CA 92780; its telephone number is (714) 505-2211. The employer identification number is 111111112, and the principal business activity code is 423910. Joseph Reed and Sam Reed each owned 15% of the common stock; Joe is President and CEO, and Sam is COO of the company. Ryan Scully is the CFO and doesn't hold any shares. All the officers are full-time employees of Reed Enterprises, Inc. Joe's Social Security number is 123-45-6788, Sam's Social Security number is 123-45-6787 and Ryan's Social Security Number is 123957894. The Company sold XYZ Company stock at 12/31/2022 that was purchased on 1/02/2022 with IPO proceeds. They purchased 1,000 shares@130 per share and sold it @ \$230 per share. The Company also has worthless stock in their portfolio. Trout Enterprises a private company that was purchased for $350,000 on January 1,2022, and the Company filed for bankruptcy on September 15,2022. Reed Enterprises, Inc. is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. No inventory reserves were recorded at 12/31/2022. Reed Enterprises, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) but elected straight line for tax purposes. For 2021, first year of operations the Company claimed tax depreciation same as the amount for book purposes. During 2022, the corporation distributed a total of $600,000 of dividends to all shareholders during 2022 . Reed Enterprises, Inc.'s GAAP redacted summarized audited public financial statements for 2022 are shown in separate file. For 2022, the Company claimed deprecation on its Office Equipment for tax purposes for 2022 as noted in the facts in the separate file. You are provided enough detailed data to complete a Form 4562 . The current year additions are $500,000 was claimed. No book tax difference in depreciation existed at 12/31/2021. Reed Enterprises, Inc. made all payments of $8,500,000 on January 15, 2023. Ignore any estimated tax penalties. Reed Enterprises, Inc. Public on NASDAQ. Financial Statements 12/31/2022 GrossSalesSalesandReturnsNetSalesCostofGoodSoldGrossProfit75,000,000(1,000,000)74,000,000(25,000,000) Dividends- 15% owed US Corp Dividends XYZ Stock owed in Corp own 10% Gain on Sale of XYZ shares 6,000,000 2,500,000 100,000 Interest Income City of Tustin Muni Bonds cos Checking Account Total income 58,200,000 Salaries CEO 3,500,000 Salaries CFO Salaries COO Bad Debts Other Salaries and Wages Taxes-State and Local Repairs and Maintenance Legal Contingency (not paid) Interest Expense: Loan to purchase Tustin Bonds Line of Credit Research and Development Expenses Travel \begin{tabular}{ll} Meals (non restaurant) & 250,000 \\ \hline Entertinment,000 & 200,000 \end{tabular} Entertainment 100,000 ContributionstoMajorCampaign175,000 Book Depreciation 2600,000 CashCharitableContributions50,000 Premiums on Life Insurance for Officers Loss- Trout Enterprises stock Total Expenses 250,000350,00029,990,000 * Depreciation for Taxes is $1,550,000 of which $500,000 is Section 179 for current year additions On January 1, 2020, Reed Enterprises, Inc., was formed to manufacture and sell Sports Memorabilia. In the current year 2022, the went Public and now is listed on the NASDAQ (Ticker Symbol REIC) is summarized as follows: Reed Enterprises, Inc.'s business address is 1010 Northeast Parkway, Irvine CA 92780; its telephone number is (714) 505-2211. The employer identification number is 111111112, and the principal business activity code is 423910. Joseph Reed and Sam Reed each owned 15% of the common stock; Joe is President and CEO, and Sam is COO of the company. Ryan Scully is the CFO and doesn't hold any shares. All the officers are full-time employees of Reed Enterprises, Inc. Joe's Social Security number is 123-45-6788, Sam's Social Security number is 123-45-6787 and Ryan's Social Security Number is 123957894. The Company sold XYZ Company stock at 12/31/2022 that was purchased on 1/02/2022 with IPO proceeds. They purchased 1,000 shares@130 per share and sold it @ \$230 per share. The Company also has worthless stock in their portfolio. Trout Enterprises a private company that was purchased for $350,000 on January 1,2022, and the Company filed for bankruptcy on September 15,2022. Reed Enterprises, Inc. is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. No inventory reserves were recorded at 12/31/2022. Reed Enterprises, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) but elected straight line for tax purposes. For 2021, first year of operations the Company claimed tax depreciation same as the amount for book purposes. During 2022, the corporation distributed a total of $600,000 of dividends to all shareholders during 2022 . Reed Enterprises, Inc.'s GAAP redacted summarized audited public financial statements for 2022 are shown in separate file. For 2022, the Company claimed deprecation on its Office Equipment for tax purposes for 2022 as noted in the facts in the separate file. You are provided enough detailed data to complete a Form 4562 . The current year additions are $500,000 was claimed. No book tax difference in depreciation existed at 12/31/2021. Reed Enterprises, Inc. made all payments of $8,500,000 on January 15, 2023. Ignore any estimated tax penalties. Reed Enterprises, Inc. Public on NASDAQ. Financial Statements 12/31/2022 GrossSalesSalesandReturnsNetSalesCostofGoodSoldGrossProfit75,000,000(1,000,000)74,000,000(25,000,000) Dividends- 15% owed US Corp Dividends XYZ Stock owed in Corp own 10% Gain on Sale of XYZ shares 6,000,000 2,500,000 100,000 Interest Income City of Tustin Muni Bonds cos Checking Account Total income 58,200,000 Salaries CEO 3,500,000 Salaries CFO Salaries COO Bad Debts Other Salaries and Wages Taxes-State and Local Repairs and Maintenance Legal Contingency (not paid) Interest Expense: Loan to purchase Tustin Bonds Line of Credit Research and Development Expenses Travel \begin{tabular}{ll} Meals (non restaurant) & 250,000 \\ \hline Entertinment,000 & 200,000 \end{tabular} Entertainment 100,000 ContributionstoMajorCampaign175,000 Book Depreciation 2600,000 CashCharitableContributions50,000 Premiums on Life Insurance for Officers Loss- Trout Enterprises stock Total Expenses 250,000350,00029,990,000 * Depreciation for Taxes is $1,550,000 of which $500,000 is Section 179 for current year additions