sased on the facts provided below: - Prepare a schedule reconciling Mindful Work, Inc's book and tax income. Ignore all CARES Act changes. - The electronic trial balance may be found on Blackboard in the Assignment 2 Folder - Please review the trial balance and see if any other adjustments or line items need to be added beyond those explicitly listed. - Update the workpaper to include any necessary adjustments to calculate taxable income. - This section is worth a total of 70 points. 60 points will be awarded based on the calculation of book-tax differences. The remaining 10 points will be based on the organization and presentation of your workpaper. - Include appropriate workpaper references and descriptions/calculations for all adjustments. - For each of the book-tax differences you identify, indicate if it: - Is permanent or temporary ( 7.5 points) - Is favorable or unfavorable (7.5 points) - Will effect/create a deferred tax asset, deferred tax liability or neither (5 points) - Complete page 1 of Mindful Work, Inc. 's Form 1120 (5 points) - Complete Mindful Work, Inc. 's Schedule M-1 on page 6 of Form 1120 (5 points) Facts: For calendar year 2021, Mindful Work, Inc., a C corporation, used the accrual method of accounting for income tax and book purposes. Mindful Work reported net financial statement income after taxes of $2,142,000 on its audited financial statements. The corporation's books and records also reveal the following information, all of which was considered in the computation of book income: 1. Mindful Work made estimated tax payments of $520,000. 2. Mindful Work's reserve for bad debts as of January 1st was $27,000. Actual write-offs during the year totaled $35,000, while the addition to the reserve for bad debts was $45,000. At December 31st the balance in the account was $46,000. 3. Mindful Work had meals expenses during the year of $76,000. 4. Mindful Work paid a $22,000 premium on their key persons (CEO and CFO). The company is the named beneficiary of both policies. Mindful Work also paid life insurance premiums as a fringe benefit to its 100 employees, who named their own beneficiaries. Those premiums were $115,000. 5. Mindful Work purchased a competing business two years ago and correctly allocated $600,000 of the purchase price to goodwill. Goodwill is amortized over 20 years for financial statement purposes and 15 years for tax purposes. Book income included 12 months of amortization. 6. The company made cash charitable contributions this year of $90,000. Of this amount, $45,000 was accrued and unpaid at December 31 . By February 1 of the following year, $20,000 of the accrued contributions will be paid. 7. Mindful Work received $90,000 of dividend income from Gold Industries, a New York corporation in which Mindful Work owns 300,000 of the 1,000,000 shares outstanding. 8. Mindful Work has a $45,000 NOL carryforward from a prior tax year available for use in the current tax year. 9. Mindful Work had the following assets in service at the end of the tax year (see following page), including two assets acquired this year. The company has never sold a 1231 asset. Mindful Work would like to take the 179 deduction this year if allowed, hut is opting to elect out of bonus depreciation. Mindful Work has never taken 179 nor bonus depreciation on previously purchased assets. In 2021,8179 maximum depreciation was 1,050,000 Disregard any taxable income limitations. sased on the facts provided below: - Prepare a schedule reconciling Mindful Work, Inc's book and tax income. Ignore all CARES Act changes. - The electronic trial balance may be found on Blackboard in the Assignment 2 Folder - Please review the trial balance and see if any other adjustments or line items need to be added beyond those explicitly listed. - Update the workpaper to include any necessary adjustments to calculate taxable income. - This section is worth a total of 70 points. 60 points will be awarded based on the calculation of book-tax differences. The remaining 10 points will be based on the organization and presentation of your workpaper. - Include appropriate workpaper references and descriptions/calculations for all adjustments. - For each of the book-tax differences you identify, indicate if it: - Is permanent or temporary ( 7.5 points) - Is favorable or unfavorable (7.5 points) - Will effect/create a deferred tax asset, deferred tax liability or neither (5 points) - Complete page 1 of Mindful Work, Inc. 's Form 1120 (5 points) - Complete Mindful Work, Inc. 's Schedule M-1 on page 6 of Form 1120 (5 points) Facts: For calendar year 2021, Mindful Work, Inc., a C corporation, used the accrual method of accounting for income tax and book purposes. Mindful Work reported net financial statement income after taxes of $2,142,000 on its audited financial statements. The corporation's books and records also reveal the following information, all of which was considered in the computation of book income: 1. Mindful Work made estimated tax payments of $520,000. 2. Mindful Work's reserve for bad debts as of January 1st was $27,000. Actual write-offs during the year totaled $35,000, while the addition to the reserve for bad debts was $45,000. At December 31st the balance in the account was $46,000. 3. Mindful Work had meals expenses during the year of $76,000. 4. Mindful Work paid a $22,000 premium on their key persons (CEO and CFO). The company is the named beneficiary of both policies. Mindful Work also paid life insurance premiums as a fringe benefit to its 100 employees, who named their own beneficiaries. Those premiums were $115,000. 5. Mindful Work purchased a competing business two years ago and correctly allocated $600,000 of the purchase price to goodwill. Goodwill is amortized over 20 years for financial statement purposes and 15 years for tax purposes. Book income included 12 months of amortization. 6. The company made cash charitable contributions this year of $90,000. Of this amount, $45,000 was accrued and unpaid at December 31 . By February 1 of the following year, $20,000 of the accrued contributions will be paid. 7. Mindful Work received $90,000 of dividend income from Gold Industries, a New York corporation in which Mindful Work owns 300,000 of the 1,000,000 shares outstanding. 8. Mindful Work has a $45,000 NOL carryforward from a prior tax year available for use in the current tax year. 9. Mindful Work had the following assets in service at the end of the tax year (see following page), including two assets acquired this year. The company has never sold a 1231 asset. Mindful Work would like to take the 179 deduction this year if allowed, hut is opting to elect out of bonus depreciation. Mindful Work has never taken 179 nor bonus depreciation on previously purchased assets. In 2021,8179 maximum depreciation was 1,050,000 Disregard any taxable income limitations