impanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,599,450. Timpanogos provided the following information relating to its 2022 activities: Life insurance proceeds as a result of CEO's death $ 238,000 Revenue from sales (for both book and tax purposes) 2,380,000 Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 24,800 Charitable contributions 214,200 Cost of goods sold for book and tax purposes 357,000 Interest income on tax-exempt bonds 47,600 Interest paid on loan obtained to purchase tax-exempt bonds 53,550 Rental income payments received and earned in 2022 18,800 Rental income payments received in 2021 but earned in 2022 11,900 Rental income payments received in 2022 but not earned by year-end 35,700 Tax depreciation 64,500 Book Depreciation 28,800 Net capital loss 49,600 Federal income tax expense for books in 2022 368,900 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 Incorporated's tax liability.
impanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,599,450. Timpanogos provided the following information relating to its 2022 activities: Life insurance proceeds as a result of CEO's death $ 238,000 Revenue from sales (for both book and tax purposes) 2,380,000 Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 24,800 Charitable contributions 214,200 Cost of goods sold for book and tax purposes 357,000 Interest income on tax-exempt bonds 47,600 Interest paid on loan obtained to purchase tax-exempt bonds 53,550 Rental income payments received and earned in 2022 18,800 Rental income payments received in 2021 but earned in 2022 11,900 Rental income payments received in 2022 but not earned by year-end 35,700 Tax depreciation 64,500 Book Depreciation 28,800 Net capital loss 49,600 Federal income tax expense for books in 2022 368,900 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 Incorporated's tax liability.
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 45P
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Question
impanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,599,450. Timpanogos provided the following information relating to its 2022 activities:
| Life insurance proceeds as a result of CEO's death | $ 238,000 |
|---|---|
| Revenue from sales (for both book and tax purposes) | 2,380,000 |
| Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. | 24,800 |
| Charitable contributions | 214,200 |
| Cost of goods sold for book and tax purposes | 357,000 |
| Interest income on tax-exempt bonds | 47,600 |
| Interest paid on loan obtained to purchase tax-exempt bonds | 53,550 |
| Rental income payments received and earned in 2022 | 18,800 |
| Rental income payments received in 2021 but earned in 2022 | 11,900 |
| Rental income payments received in 2022 but not earned by year-end | 35,700 |
| Tax |
64,500 |
| Book Depreciation | 28,800 |
| Net capital loss | 49,600 |
| Federal income tax expense for books in 2022 | 368,900 |
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 Incorporated's tax liability.
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