Wireless Tools, Inc., Inc is a calendar year, accrual basis corporation $($book and tax$).$ The company has total assets of $$5,000,125.$ The company reported $$390,000$ in net income after federal income tax of $$81,900$ on its audited financial statements for the current year. Based on last year's tax liability, estimated payments were made on a timely basis and in the amount of $$20,500$ per quarter.

Book income includes $$12,000$ of dividend income from an investment in MidSouth, Inc. common stock $($less than $20\%$ ownership interest$)$:

Financial statement depreciation totals $$302,389.$ Tax depreciation totals :$.$$$431,489.$

Two years ago, Wireless Tools, Inc. paid $$10,000$ of start$-$up costs. For book purposes, these costs are being amortized over $30$ years. For tax purposes, the minimum amortization period is being used.

Book Amort $=\frac{10000}{30}=333.$ Tax Amort $=10,\frac{000}{15}=666$

On March $15$ of the current year, Wireless Tools, Inc. had to$\_$pay$\_$an underpayment$\_$of tax penalty$\_$to the IRS in the amount$\_$of $$787.$

Wireless Tools, Inc. earned $$12,225$ in interest income on state of oklahoma public school bonds $($basis $=$$$125,000).$ The company earned $$2,000$ on U$.$S$.$ government bonds $($basis $=$$$40,000).$

On July $4$ of the current year, Wireless Tools, Inc. sold $10,000$ shares in Mid$-$South, Inc. for $$525,000.$ The stock was purchased during late $2001$ for $$300,000.$

Life insurance premiums totaling $$3,000,$ on a "key$-$man" life insurance policy were paid during the year. The policy is on the life of the CEO, Lois Blackwell.

This year, a cash donation of $$75,000$ was made to American Cancer Services $($a qualified domestic charity$).$

The above facts have been correctly reflected in financial statement net income.

Instructions:

Wireless Tools, Inc. had taxable income of $$362,126$ on its tax return. Using the reconciliation method, reconcile Wireless Tools Inc.$\text{'}$s book income to taxable income.