Permtemp Corporation (EIN: XX-1234567) formed in 2019 and, for that year, reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Sales $20,000,000 Cost of goods sold (15,000,000) Gross profit $ 5,000,000 Dividend income 50,000 Tax-exempt interest income 15,000 Total income $ 5,065,000 Expenses: Depreciation $ 800,000 Bad debts 400,000 Charitable contributions 100,000 Interest 475,000 Meals and entertainment 45,000 Other 3,855,000 Total expenses (5,675,000) Net loss before federal income taxes $ (610,000)

ash $ 500,000 Accounts receivable $ 2,000,000 Allowance for doubtful accounts (250,000) 1,750,000 Inventory 4,000,000 Fixed assets $10,000,000 Accumulated depreciation (800,000) 9,200,000 Investment in corporate stock 1,000,000 Investment in tax-exempt bonds 50,000 Total assets $16,500,000 Accounts payable $ 2,610,000 Long-term debt 8,500,000 Common stock 6,000,000 Retained earnings (610,000) Total liabilities and equity $16,500,000 Additional information for 2019: The investment in corporate stock is comprised of less-than-20%-owned corporations. Depreciation for tax purposes is $1.4 million under MACRS. Bad debt expense for tax purposes is $150,000 under the direct writeoff method. Because of limitations, none of the charitable contributions will be deductible for tax purposes. Assume that $25,000 of the $45,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations effec-tive in 2019, $35,000 of the meals and entertainment expenses will be disallowed for tax purposes. The corporate tax rate in 2019 was 21%. Required for 2019: a. Prepare page 1 of the 2019 Form 1120, computing the corporations NOL. b. Determine the corporations deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP ac-counting under ASC 740. Use the balance sheet prepare Schedule L of the 2019 Form 1120. c. Prepare the 2019 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporations effective tax rate to the statutory 21% tax rate. For 2020, Permtemp reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities

Sales $33,000,000 Cost of goods sold (22,000,000) Gross profit $11,000,000 Dividend income 55,000 Tax-exempt interest income 15,000 Total income $11,070,000 Expenses: Depreciation $ 800,000 Bad debts 625,000 Charitable contributions 40,000 Interest 455,000 Meals and entertainment 60,000 Other 4,675,000 Total expenses (6,655,000) Net income before federal income taxes $ 4,415,00

Cash $ 2,125,000 Accounts receivable $ 3,300,000 Allowance for doubtful accounts (450,000) 2,850,000 Inventory 6,000,000 Fixed assets $10,000,000 Accumulated depreciation (1,600,000) 8,400,000 Investment in corporate stock 1,000,000 Investment in tax-exempt bonds 50,000 Total assets $20,425,000 Accounts payable $ 2,120,000 Long-term debt 8,500,000 Common stock 6,000,000 Retained earnings 3,805,000 $20,425,000 Additional information for 2020: Assume that $40,000 of the $60,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations effec-tive in 2020, $50,000 of the meals and entertainment expenses will be disallowed for tax purposes. Depreciation for tax purposes is $2.45 million under MACRS. Bad debt expense for tax purposes is $425,000 under the direct writeoff method. The corporate tax rate in 2020 is 21%. Required for 2020: a. Prepare page 1 of the 2020 Form 1120, computing the corporations taxable income and tax liability. b. Determine the corporations deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP ac-counting ASC 740. Use the balance sheet information to prepare Schedule L of the 2020 Form 1120. c. Prepare the 2020 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporations effective tax rate to the statutory 21% tax rate

Permtemp Corporation (EIN: XX-1234567) formed in 2019 and, for that year, reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Additional information for 2019: - The investment in corporate stock is comprised of less-than-20\%-owned corporations. - Depreciation for tax purposes is $1.4 million under MACRS. - Bad debt expense for tax purposes is $150,000 under the direct writeoff method. - Because of limitations, none of the charitable contributions will be deductible for tax purposes. - Assume that $25,000 of the $45,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations effective in 2019,$35,000 of the meals and entertainment expenses will be disallowed for tax purposes. - The corporate tax rate in 2019 was 21%. Required for 2019: a. Prepare page 1 of the 2019 Form 1120 , computing the corporation's NOL. b. Determine the corporation's deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting under ASC 740. Use the balance sheet information to prepare Schedule L of the 2019 Form 1120. c. Prepare the 2019 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporation's effective tax rate to the statutory 21% For 2020 , Permtemp reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Additional information for 2020 : - Assume that $40,000 of the $60,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations effective in 2020,$50,000 of the meals and entertainment expenses will be disallowed for tax purposes. - Depreciation for tax purposes is $2.45 million under MACRS. - Bad debt expense for tax purposes is $425,000 under the direct writeoff method. - The corporate tax rate in 2020 is 21%. Required for 2020: a. Prepare page 1 of the 2020 Form 1120 , computing the corporation's taxable income and tax liability. b. Determine the corporation's deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting ASC 740. Use the balance sheet information to prepare Schedule L of the 2020 Form 1120. c. Prepare the 2020 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporation's effective tax rate to the statutory 21% tax rate. Permtemp Corporation (EIN: XX-1234567) formed in 2019 and, for that year, reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Additional information for 2019: - The investment in corporate stock is comprised of less-than-20\%-owned corporations. - Depreciation for tax purposes is $1.4 million under MACRS. - Bad debt expense for tax purposes is $150,000 under the direct writeoff method. - Because of limitations, none of the charitable contributions will be deductible for tax purposes. - Assume that $25,000 of the $45,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations effective in 2019,$35,000 of the meals and entertainment expenses will be disallowed for tax purposes. - The corporate tax rate in 2019 was 21%. Required for 2019: a. Prepare page 1 of the 2019 Form 1120 , computing the corporation's NOL. b. Determine the corporation's deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting under ASC 740. Use the balance sheet information to prepare Schedule L of the 2019 Form 1120. c. Prepare the 2019 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporation's effective tax rate to the statutory 21% For 2020 , Permtemp reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Additional information for 2020 : - Assume that $40,000 of the $60,000 meals and entertainment expenses pertained to entertainment and $20,000 pertained to business meals. Because of limitations effective in 2020,$50,000 of the meals and entertainment expenses will be disallowed for tax purposes. - Depreciation for tax purposes is $2.45 million under MACRS. - Bad debt expense for tax purposes is $425,000 under the direct writeoff method. - The corporate tax rate in 2020 is 21%. Required for 2020: a. Prepare page 1 of the 2020 Form 1120 , computing the corporation's taxable income and tax liability. b. Determine the corporation's deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting ASC 740. Use the balance sheet information to prepare Schedule L of the 2020 Form 1120. c. Prepare the 2020 Schedule M-3 for Form 1120. d. Prepare a schedule that reconciles the corporation's effective tax rate to the statutory 21% tax rate