Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2021, it reported financial statement income after taxes of $1,570,140. Timpanogos provided the following information relating to its 2021 activities: Life insurance proceeds as a result of CEOs death $ 234,000 Revenue from sales (for both book and tax purposes) 2,340,000 Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 24,570 Qualified charitable contributions 210,600 Cost of goods sold for book and tax purposes 351,000 Interest income on tax-exempt bonds 46,800 Interest paid on loan obtained to purchase tax-exempt bonds 52,650 Rental income payments received and earned in 2021 17,550 Rental income payments received in 2020 but earned in 2021 11,700 Rental income payments received in 2021 but not earned by year-end 35,100 Tax depreciation 64,350 Book Depreciation 29,250 Net capital loss 49,140 Federal income tax expense for books in 2021 362,700 Required: 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). Complete Schedule M-1 for Timpanogos. Compute Timpanogos Incorporateds tax liability for 2021.

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.)

Description	Book Income (Dr) Cr	Book-tax adjustments (Dr)	Permanent (P) or Temporary (T)	Book-tax adjustments Cr	Permanent (P) or Temporary (T)	Taxable Income (Dr) Cr
Revenue from sales
Cost of goods sold
Gross profit
Other income:
Life insurance proceeds from CEOs 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

• B.

  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
  	Note: The corporation may be required to file Schedule M-3. See instructions.
  1 Net income (loss) per books					7 Income recorded on books this year not
  2 Federal income tax per books					included on this return (itemize):
  3 Excess of capital losses over capital gains					Tax-exempt interest
  4 Income subject to tax not recorded on books this year (itemize):
  					8 Deductions on this return not charged
  5 Expenses recorded on books this year not deducted on this return (itemize):					against book income this year (itemize):
  a Depreciation					a Depreciation
  b Charitable contributions					b Charitable contributions
  c Travel and entertainment					c Other (itemize):
  Other (itemize):
  					9 Add lines 7 and 8
  6 Add lines 1 through 5					10 Income (page 1, line 28)line 6 less line 9
  	THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education.

• C.

  Compute Timpanogos Incorporateds tax liability for 2021.

  Tax liability