Timpanogos Inc. is an accrual-method calendar-year corporation. For 2018, it reported financial statement income after taxes of $1,552,000. Timpanogos provided the following information relating to its 2018 activities:
Life insurance proceeds as a result of CEO’s death...........................$200,000
Revenue from sales (for both book and tax purposes).....................2,000,000

Premiums paid on the key-person life 

insurance policies (the policies have no cash surrender value)........21,000
Charitable contributions........................................................................180,000
Interest income on tax-exempt bonds.................................................40,000
Interest paid on loan obtained to purchase tax-exempt bonds........45,000
Rental income payments received and earned in 2018.....................15,000
Rental income payments received in 2017 but earned in 2018
Rental income payments received in 2018 

but not earned by year-end....................................................................30,000
MACRS depreciation................................................................................55,000
Book depreciation....................................................................................25,000
Net capital loss.........................................................................................42,000
Federal income tax expense for books in 2018 ................................400,000

Required:
a. Reconcile book income to taxable income for Timpanogos Inc. 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 or temporary.

c. Complete Schedule M-1 for Timpanogos. 

d. Compute Timpanogos Inc.’s tax liability.