The Following Income and expense accounts appeared in the book accounting records of Rocket Corporation,an accrual basis taxpayer, for the current calendar year....

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Part A.) Prepare a worksheet reconciling Rockets book income with its taxable income (before special deductions). Six columns should be used- two (one debit and one credit) for each of the following three major headings: book income, Schedule M-1 adjustments, and taxable income.

Part B.)Prepare a tax provision reconcilation as in Step 9 of the Tax Provision Process. Assume a 34% tax rate.

The Following Income and expense accounts appeared in the book accounting records of Rocket Corporation, an accrual basis taxpayer, for the current calendar year. Account Title Net Sales 1 Dividends 2 Interest 3 Gain on sale of stock Key-person life insurance proceeds Cost of goods sold Salaries and wages 4 Bad debts Payroll taxes 5 Interest expense 6 Charitable contributions 7 Depreciation 8 Other expenses Federal income taxes Net income Total Debit $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Credit 3,230,000.00 10,000.00 18,000.00 9,000.00 100,000.00 2,000,000.00 500,000.00 13,000.00 62,000.00 12,000.00 50,000.00 70,000.00 40,000.00 165,920.00 454,080.00 3,367,000.00 $ 3,367,000.00 1 Dividends were from Star Corporation, a 30% owned domestic corporation 2 Interest revenue consists of interest on coporate bonds, a $15000 and municipal bonds, $3000. 3 The stock is a capital asset held for three years prior to sale 4 Rocket uses specific writeoff method of accounting for bad debts. 5 Interest expense consists of $11000 interest incurred on funds bowrroed for working capital and $1000 interest on funds borrowed to purchase municipal bonds. 6 Rocket paid all contributions in cash during the current year to State University. 7 Rocket calculated depreciation per books using the straight-line method. For income tax purposes, depreciations amounted to $95000 8 Other expenses include premiums of $5000 on the key person life insurance policy covering Rockets president who died in December 9 Qualified productions activities income is $300,000 10 Rocket has a $90,000 NOL carryover from prior years. Rocket Corporation, Part A.) Prepare a worksheet reconciling Rockets book income with its taxable incom (one debit and one credit) for each of the following three major headings: book inc Part B.) Prepare a tax provision reconcilation as in Step 9 of the Tax Provision Proce ts book income with its taxable income (before special deductions). Six columns shoulw be used- two wing three major headings: book income, Schedule M-1 adjustments, and taxable income. in Step 9 of the Tax Provision Process. Assume a 34% tax rate. Book Income Debit Account Name Net sales Cost of goods sold Dividend (30% receipts form domesticcompany which is exempt) Interest Corporate Bond Municipal Bond Gain on sale of stock Key person life Insurance proceeds Salaries and wages Bad debts Payroll Taxes Interest Expenses Charitable Contribution Depreciation Other Expenses Federal Inccome taxes Qualified production activity income Net Income Total Adjustments Credit 3,230,000 2,000,000 10,000 18,000 9,000 100,000 500,000 13,000 62,000 12,000 50,000 70,000 40,000 166,000 3,367,000 454,000 3,367,000 Taxable Income Debit Credit Debit Credit 3,230,000 2,000,000 3,000 7,000 15,000 3,000 9,000 1,000 15,000 280,000 301,000 300,000 280,000 301,000 500,000 13,000 62,000 11,000 50,000 95,000 40,000 3,561,000 300,000 790,000 3,561,000