Reconcile book income to taxable income on worksheet $($below$).$

Notes:

SMP owns $10\%$ of the outstanding S Corp. $($S$)$ stock. S Corp. reported $$2,000,000$ of

income for the year. SMP accounted for its investment in S Corp under the equity

method and it recorded its pro rata share of S Corps's earnings for the year. S Corp also

distributed a $$100,000$ dividend to SMP$.$

Of the $$20,000$ interest income, $$5,000$ was from Ford Motor, $$7,000$ was from a Toyota,

$$6,000$ was from a Town of Smith Field municipal bond, and the remaining $$2,000$ was

from an investment in a CD $($certificate of deposit$).$

Life insurance proceeds from death of the CFO.

This includes total officer compensation of $$3,500,000.$ The CEO was paid $$1,250,000$

for salary in $2018($no one officer received more than $$1,000,000$ compensation$).$

$$2,000$ is the portion of interest paid on a loan taken out to obtain a tax$-$exempt municipal

bond from the City of Smith Field.

SMP actually wrote off $$48,000$ of its accounts receivable as uncollectible.

Tax depreciation was $$700,000.$

In the current year, SMP made $$23,500$ in actual payments on warranties it provided to

customers.

SMP made $$750,000$ of cash contributions to qualified charities during the year.

On January $1$ of this year SMP acquired the assets of another business. In the process it

acquired $$200,000$ of goodwill. At the end of the year, SMP wrote off $$10,000$ of the

goodwill as impaired.

SMP expensed all of its organizational expenditures for book purposes. It expensed the

maximum amount of organizational expenditures allowed for tax purposes.

The other expenses do not contain any items with book$-$tax differences.

SMP received rental income payments in $2018$ that relates to $2019.$ They have not earned

the amount as of year$-$end and was not recorded in the books. The total amount received

was $$21,500.$ This is what I have so far but I think I am way off.$\backslash$table$[[$Book to Tax Worksheet:,$],[$SMP corp.,,Book to Tax,$],[$Income statement,Book,Adjustments,Taxable$],[$For current year,Income,$($Dr$.),Cr.,$Income$],[$Revenue from sales,$$47,000,000,,,$$$47,000,000$Book to Tax Worksheet:

SMP corp.

Income statement

For current year

Revenue from sales

Cost of Goods Sold

Gross profit

Other income:

Income from investment in $S$

CORP. stock

Interest income

Capital gains $($losses$)$

Life insurance proceeds

Miscellaneous income

Gross Income

Expenses:

Compensation

Interest expense

Advertising

Repairs and Maintenance

Rent

Bad Debt expense

Depreciation

Warranty expenses

Charitable donations

Life insurance premiums

Meals

Goodwill impairment

Organizational expenditures

Other expenses

Total expenses

Income before taxes

Provision for income taxes

Net Income after taxes

Book to Tax

Book

Adjustments

$($Dr$.)$

Cr$.$

Income

$$47,000,000$

$(34,000,000{)}_{?}$

$xxxxxxxxx

$200,000$

$20,000$

$(4,000)$

$315,000$

$50,{000}_{?}$

$(7,500,000)$

$(5,000)$

$(1,350,000)$

$(75,000)$

$(22,000)$

$(51,000)$

$(1,000,000)$

$(90,000)$

$(750,000)$

$(45,000)$

$(12,500)$

$(10,000)$

$(59,000)$

$(140,000{)}_{?}$

$($$$11,390,000)$

$XXXXXXX

$(520,000{)}_{?}$

$XXXXXX