Alpha corp reports the following results for the current year:

net income per books (before federal income taxes ) 738,000

federal income tax expense per books (156,240)

net income per books (after federal income taxes) 581,760

tax-exempt interest income 10,000

interest on a loan to purchase tax-exempt bonds 7,000

macros depreciation exceeding book depreciation 40,000

net capital loss 8,000

insurance premium on life of corporate office where alpha is the beneficiary 9,000

excess charitable contributions carriedover to next year 4,000

a. prepare a reconciliation of alsphas taxable income before special deductions with its book income, fill out a schedule M-1

Schedule M-1

1 Net income (loss) per books . . . . .

2 Federal income tax per books . . . .

3 Excess of capital losses over capital gains

4 Income subject to tax not recorded on books this year (itemize):

5 Expenses recorded on books this year not deducted on this return (itemize):

a Depreciation . . . . $

b Charitable contributions $

c Travel and entertainment $

d Other (itemize):

6 Add lines 1 through 5 . . . . . . .

7 Income recorded on books this year not included on this return (itemize):

a Tax-exempt interest $

b Other (itemize):

8 Deductions on this return not charged against book income this year (itemize):

a Depreciation . . $

b Charitable contributions $

c Other (itemize):

9 Add lines 7 and 8 . . . . . . .

10 Income—line 6 less line 9 . . . .