The CL Corporation is organized in North Carolina, and it operates in several of the southern US states. CL is owned by a small group of private equity investors. It provides artistic services on a contract basis, e.g., doing set design for films, plays, and operas, and processing digital information for film productions. CL follows GAAP, and it is required to file a Schedule M-3 with its annual Form 1120. CL holds no net operating loss (NOL) carryovers. Corporate policy is not to incur income tax underpayment penalties.

CLs CFO has asked for your assistance in generating information needed for the corporations financial statements. The financial accounting records of CL for the current year produce the following abbreviated trial balance. Other information is available from last years tax file and supporting records. Follow all the public company disclosure rules of ASC 740, without regard to materiality or significance. Use the format attached at the end when computing your answers to the following questions.

Information from CL Files (all $K)

1. CL reported per GAAP sales revenue of $11, 000 and CGS of $7,400
2. CL recorded an expense of $1,000 for its defined benefit retirement plans, but only $750 of this amount qualified for an income tax deduction in the current year.
3. The interest income was received from bonds issued by ExxonMobil ($30) and the City of Charleston ($12).
4. The Deferred Revenue account was established because CL received full payment last year on a contract for services, one half of which CL performed this year, and one half of which it will perform next year. CL elected a tax deferral of this gross income under RevProc 2004-34.
5. CL holds life insurance policies on its five officers. Activity concerning these policies this year included the following:

Proceeds collected, death of CIO	$1,000
Premiums paid, all policies	670
Increase in cash value, all policies	120

6. CL sold some of its investment land, held as a capital asset at a $15 loss.
7. CLs tax department reported a $44 total of documented expenses for meals.
8. CL truck drivers were responsible for $10 in speeding tickets, all of which the company paid during the current year.
9. CL donated $14 to the United Way and had a carryover of $5 from last year.
10. CL recorded $ 42 in depreciation expense and has computed $67 for tax purposes
11. CL accrued a current-year tax expense of $500 federal and $225 state.
12. Statutory tax rates for CL are 21% federal and 8% for the states (blended). Unless otherwise noted, state income tax laws conform with the federal income tax provisions in all states in which CL has nexus. None of the states with which CL has nexus allows a deduction for book federal income tax expense.
13. There are no enacted state or federal income tax rate changes that apply to CL.
14. CL anticipates no need for a valuation allowance relative to its tax deferrals.
15. Other balance sheet data follows:

	Item	Beginning of year balance	End of Year balance
A	Book Bad Debt Allowance	110	125
B	Cumulative Unicap Adjustment	40	75

CL Corporation

Balance Sheet (Summary ($000)

End of Current Year, before pending computations

ASSETS
Cash	$ 1,500
Accounts receivable	1,100
Inventories	1,400
Property, plant & equipment, net of depreciation	2,000
Investment land	2,550
Notes receivable, long term	210
Deferred tax assets	40
All other assets	2,750
Total	$ 11,550
LIABILITIES and SHAREHOLDERS EQUITY
Accounts payable	$ 250
Taxes payable	725
Deferred revenues	200
Accrued pension liabilities	3,250
Notes payable, current	175
Notes payable, long-term	1,505
Deferred tax liabilities	65
Common stock	1,000
Retained earning	4,380
Total	$11,550

1. Identify and measure CLs book/tax differences. Classify each of the book/tax differences as temporary or permanent.