Timpanogos Inc. is an accrual-method calendar-year corporation. For 2018, it reported financial statement income after taxes of $1,152,000. Timpanogos provided the following information relating to its 2018 activities:

Life insurance proceeds as a result of CEOs death	$	200,000
Revenue from sales (for both book and tax purposes)		2,000,000
Premiums paid on the key-person life insurance policies. The policies have no cash surrender value.		21,000
Charitable contributions		180,000
Cost of goods sold for book and tax purposes		300,000
Interest income on tax-exempt bonds issued in 2017		40,000
Interest paid on loan obtained to purchase tax-exempt bonds		45,000
Rental income payments received and earned in 2018		15,000
Rental income payments received in 2017 but earned in 2018		10,000
Rental income payments received in 2018 but not earned by year-end		30,000
MACRS depreciation		55,000
Book Depreciation		25,000
Net capital loss		42,000
Federal income tax expense for books in 2018		500,000

Required:

1. Reconcile book income to taxable income for Timpanogos Inc. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income.
2. Identify each book-tax difference as either permanent (P) or temporary (T).
3. Complete Schedule M-1 for Timpanogos.
4. Compute Timpanogos Inc.s tax liability for 2018.