Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2023, it reported financial statement income after taxes of $1,436,850. Timpanogos provided the following information relating to its activities for the year:

Life insurance proceeds as a result of CEO's death	$ 214,000
Revenue from sales (for both book and tax purposes)	2,140,000
Premiums paid on the key-person life insurance policies. The policies have no cash surrender value.	22,400
Charitable contributions	192,600
Cost of goods sold for book and tax purposes	321,000
Interest income on tax-exempt bonds	42,800
Interest paid on loan obtained to purchase tax-exempt bonds	48,150
Rental income payments received and earned in 2023	16,400
Rental income payments received in 2022 but earned in 2023	10,700
Rental income payments received in 2023 but not earned by year-end	32,100
Tax depreciation	58,500
Book Depreciation	26,400
Net capital loss	44,800
Federal income tax expense for books	331,700

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 Incorporated's tax liability.

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).

Note: Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.

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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	$2,140,000					$2,140,000
Cost of goods sold	(321,000)					(321,000)
Gross profit	$1,819,000					$1,819,000
Other income:
Life insurance proceeds from CEOs death	214,000		P			0
Interest income on tax-exempt bonds	42,800		P			0
Net capital loss	(44,800)					(44,800)
Rental income
Gross income	$2,031,000					$1,819,000
Expenses:
Interest paid to obtain tax-exempt bonds
Depreciation
Life insurance premiums
Federal income tax expense
Total expenses before charitable contribution, NOL, and DRD	0					0
Income before charitable contribution, NOL, and DRD
NOL carryover from prior year
Taxable income for charitable contribution limitation purposes						$0
Charitable contributions (after 10% limit)
Book or Taxable income	$0	$0		$0		$0

• Required A and B