The following income and expense accounts appeared in the book accounting records of Rocket Corporation, an accrual basis taxpayer, for the current calendar year. .: (Click on the icon to view the book accounting records.) (Click on the icon to view additional information.) Read the requirements. Requirement a. Complete the worksheet to reconcile Rocket's book income with its taxable income (before special deductions). Begin by entering the adjustments needed to reconcile Rocket's book income with its taxable income before special deductions, then, complete the worksheet by computing the taxable amount. (If a box is not used in the table leave the box empty, do not enter a zero.) Rocket Corporation Reconciliation of Book Income to Taxable income before Special Deductions Book income Adjustments Account Title Debit Credit Debit Credit Net sales $ 3,230,000 Dividends 10,000 Interest 18,000 Gain on sale of stock 9,000 Key-person life insurance proceeds 100,000 Cost of goods sold $ 2,000,000 Salaries and wages 500,000 Bad debts 13,000 Payroll taxes 62,000 Interest expense 12,000 Charitable contributions 50,000 Depreciation 70,000 Other expenses 40,000 Federal income taxes 165,920 U.S. production activities deductions Net income/Taxable income before special deductions 454,080 Enter any number in the edit fields and then click Check Answer. LUI IU I COMPIULU) Question Help A Data Table acc Book Income ok in Account Title Debit Net sales poki $ * More Info ome Credit 3,230,000 10,000 (1) 18,000 (2) 9,000 (3) 100,000 30,0 $ 10,0 18,00 9,0 Dividends Interest Gain on sale of stock Key-person life insurance proceeds Cost of goods sold Salaries and wages Bad debts Payroll taxes Interest expense Charitable contributions Depreciation Other expenses Federal income taxes 00,0 2,000,000 500,000 13,000 (4) 62,000 12,000 (5) 50,000 (6) 70,000 (7) 40,000 (8) 165,920 454,080 3,367,000 The following additional information applies. 1. Dividends were from Star Corporation, a 30%-owned domestic corporation 2. Interest revenue consists of interest on corporate bonds, $15,000, and municipal bonds, $3,000. 3. The stock is a capital asset held for three years prior to sale 4. Rocket uses the specific writeoff method of accounting for bad debts. 5. Interest expense consists of $11,000 interest incurred on funds borrowed for working capital and $1,000 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, depreciation amounted to $95,000 8. Other expenses include premiums of $5,000 on the key-person life insurance policy covering Rocket's president, who died in December 9. Qualified production activities income is $300,000. 10. Rocket has a $90,000 NOL carryover from prior years. Net income $ $ 3,367,000 Total Print Done Print Done The following income and expense accounts appeared in the book accounting records of Rocket Corporation, an accrual basis taxpayer, for the current calendar year. .: (Click on the icon to view the book accounting records.) (Click on the icon to view additional information.) Read the requirements. Requirement a. Complete the worksheet to reconcile Rocket's book income with its taxable income (before special deductions). Begin by entering the adjustments needed to reconcile Rocket's book income with its taxable income before special deductions, then, complete the worksheet by computing the taxable amount. (If a box is not used in the table leave the box empty, do not enter a zero.) Rocket Corporation Reconciliation of Book Income to Taxable income before Special Deductions Book income Adjustments Account Title Debit Credit Debit Credit Net sales $ 3,230,000 Dividends 10,000 Interest 18,000 Gain on sale of stock 9,000 Key-person life insurance proceeds 100,000 Cost of goods sold $ 2,000,000 Salaries and wages 500,000 Bad debts 13,000 Payroll taxes 62,000 Interest expense 12,000 Charitable contributions 50,000 Depreciation 70,000 Other expenses 40,000 Federal income taxes 165,920 U.S. production activities deductions Net income/Taxable income before special deductions 454,080 Enter any number in the edit fields and then click Check Answer. LUI IU I COMPIULU) Question Help A Data Table acc Book Income ok in Account Title Debit Net sales poki $ * More Info ome Credit 3,230,000 10,000 (1) 18,000 (2) 9,000 (3) 100,000 30,0 $ 10,0 18,00 9,0 Dividends Interest Gain on sale of stock Key-person life insurance proceeds Cost of goods sold Salaries and wages Bad debts Payroll taxes Interest expense Charitable contributions Depreciation Other expenses Federal income taxes 00,0 2,000,000 500,000 13,000 (4) 62,000 12,000 (5) 50,000 (6) 70,000 (7) 40,000 (8) 165,920 454,080 3,367,000 The following additional information applies. 1. Dividends were from Star Corporation, a 30%-owned domestic corporation 2. Interest revenue consists of interest on corporate bonds, $15,000, and municipal bonds, $3,000. 3. The stock is a capital asset held for three years prior to sale 4. Rocket uses the specific writeoff method of accounting for bad debts. 5. Interest expense consists of $11,000 interest incurred on funds borrowed for working capital and $1,000 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, depreciation amounted to $95,000 8. Other expenses include premiums of $5,000 on the key-person life insurance policy covering Rocket's president, who died in December 9. Qualified production activities income is $300,000. 10. Rocket has a $90,000 NOL carryover from prior years. Net income $ $ 3,367,000 Total Print Done Print Done