Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2021, it reported financial statement income after taxes of $1,449,360. Timpanogos provided the following information relating to its 2021 activities: Life insurance proceeds as a result of CEO's death Revenue from sales (for both book and tax purposes) Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. Qualified charitable contributions Cost of goods sold for book and tax purposes Interest income on tax-exempt bonds Interest paid on loan obtained to purchase tax-exempt bonds Rental income payments received and earned in 2021 Rental income payments received in 2020 but earned in 2021 Rental income payments received in 2021 but not earned by year-end Tax depreciation Book Depreciation Net capital loss Federal income tax expense for books in 2021 $ 216,000 2,160,000 22,680 194,400 324,000 43,200 48,600 16,200 10,800 32,400 59,400 27,000 45,360 334,800 Required: a. Reconcile book income to taxable income for Timpanogos Incorporated. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income. b. Identify each book-tax difference as either permanent (P) or temporary (T). c. Complete Schedule M-1 for Timpanogos. d. Compute Timpanogos Incorporated's tax liability for 2021. Req A and B Req C Req D Reconcile book income to taxable income for Timpanogos Incorporated. Be sure to start with book income and identify all of the adjustments necessary to arrive at taxable income. Identify each book-tax difference as either permanent (P) or temporary (T). (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Revenue from sales Cost of goods sold Description Gross profit Other income: Life insurance proceeds from CEO's death Interest income on tax-exempt bonds Rental income Gross income Expenses: Interest paid to obtain tax-exempt bonds Net capital loss Depreciation Life insurance premiums Federal income tax expense Total expenses before charitable contribution, NOL, and DRD Income before charitable contribution, NOL, and DRD NOL carryover from prior year Taxable income for charitable contribution limitation purposes Charitable contributions Book/Taxable income Req A and B Req C Req D Complete Schedule M-1 for Timpanogos. (Enter all values as positive numbers.) Schedule M-1: Reconciliation of Income (Loss) per Books With Income per Return 1. Net income (loss) per books 2. Federal income tax per books 3. Excess of capital losses over capital gains 4. Income subject to tax not recorded on books this year (temize): Rental income 5. Expenses recorded on books this year not deducted on this return (temize): a. Depreciation b. Charitable contributions c. Travel and entertainment Interest paid to obtain tax-exempt bonds Life insurance premiums 6. Total 7. Income recorded on books this year not included on this return (itemize): Tax-exempt interest Life insurance proceeds from CEO's death 8 Deductions on this return not charged against book income this year (itemize): a. Depreciation b. Charitable contributions Section 283A costs 9. Total 10. Income Req A and B Req C Req D Compute Timpanogos Incorporated's tax liability for 2021. Tax liability Book Income (Dr) Cr Book-tax adjustments (Dr) Permanent (P) or Temporary (T) Book-tax adjustments Cr Permanent (P) or Taxable Temporary (T) Income (Dr) Cr < Req C Req D > S 0 $ 0 0 $ 0 $ 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 0 $ 0