$ 232,000 2,320,000 24,200 208,800 348,000 46,400 52,200 18,200 11,600 34,800 63,000 28,200 48,400 359,600 Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,558,800. Timpanogos provided the following information relating to its 2022 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. 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 2022 Rental income payments received in 2021 but earned in 2022 Rental income payments received in 2022 but not earned by year-end Tax depreciation Book Depreciation Net capital loss Federal income tax expense for books in 2022 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. Description Book Income (Dr) Cr Book-tax adjustments (Dr) Permanent (P) or Temporary (T) Book-tax adjustments Cr Permanent (P) or Temporary (T) Revenue from sales Cost of goods sold 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 (Dr) Cr
$ 232,000 2,320,000 24,200 208,800 348,000 46,400 52,200 18,200 11,600 34,800 63,000 28,200 48,400 359,600 Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,558,800. Timpanogos provided the following information relating to its 2022 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. 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 2022 Rental income payments received in 2021 but earned in 2022 Rental income payments received in 2022 but not earned by year-end Tax depreciation Book Depreciation Net capital loss Federal income tax expense for books in 2022 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. Description Book Income (Dr) Cr Book-tax adjustments (Dr) Permanent (P) or Temporary (T) Book-tax adjustments Cr Permanent (P) or Temporary (T) Revenue from sales Cost of goods sold 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 (Dr) Cr
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 5BCRQ
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