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Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2021, it reported financial statement income after taxes of $1,409,100. Timpanogos provided the following information relating to

Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2021, it reported financial statement income after taxes of $1,409,100. Timpanogos provided the following information relating to its 2021 activities:

Life insurance proceeds as a result of CEOs death $ 210,000
Revenue from sales (for both book and tax purposes) 2,100,000
Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 22,050
Qualified charitable contributions 189,000
Cost of goods sold for book and tax purposes 315,000
Interest income on tax-exempt bonds 42,000
Interest paid on loan obtained to purchase tax-exempt bonds 47,250
Rental income payments received and earned in 2021 15,750
Rental income payments received in 2020 but earned in 2021 10,500
Rental income payments received in 2021 but not earned by year-end 31,500
Tax depreciation 57,750
Book Depreciation 26,250
Net capital loss 44,100
Federal income tax expense for books in 2021 325,500

Required:

  1. 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.
  2. Identify each book-tax difference as either permanent (P) or temporary (T).
  3. Complete Schedule M-1 for Timpanogos.
  4. Compute Timpanogos Incorporateds tax liability for 2021.
image text in transcribed :econcile 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 ir ook-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.)

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