Comprehensive Problem $5-64($LO $5-1,$ LO $5-2,$ LO $5-3)($Algo$)$

Timpanogos Incorporated is an accrual$-$method, calendar$-$year corporation. For $2024,$ it reported financial statement income after taxes of $$1,585,900.$ Timpanogos provided the following information relating to its activities for the year:

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 $2024$

Rental income payments received in $2023$ but earned in $2024$

Rental income payments received in $2024$ but not earned by year$-$end

Tax depreciation

Book Depreciation

Net capital loss

$$236,000$

$2,360,000$

$24,600$

$212,400$

$354,000$

$47,200$

$53,100$

$18,600$

$11,800$

$35,400$

$64,000$

$28,600$

$49,200$

$365,300$

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.

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book$-$tax difference as either permanent $(P)$ or temporary $(T).$

Note: Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.

$\backslash$table$[[$Description$,$Book Income $($Debit$)$ Credit,Book$-$tax adjustments $($Debit$),$Permanent $(P)$ or Temporary $(T),$Book$-$tax adjustments Credit,Permanent $(P)$ or Temporary $(T),$Taxable Income $($Debit$)$ Credit$],[$Revenue from sales,,,,,,$],[$Cost of goods, sold,,,,,,$],[$Gross profit,,,,,,$],[$Other income:,,,,,,$],[$Life insurance proceeds from CEO's death,,,,,,$],[$Interest income on tax$-$exempt bonds,,,,,,$],[$Net capital loss,,,,,,$],[$Rental income,,,,,,$],[$Gross income,,,,,,$],[$Expenses:$,,,,,,],[$Interest paid to obtain tax$-$exempt bonds,,,,,,$],[$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 for charitable contribution limitation purposes,,,,,$,],[$Charitable contributions $($after $10\%$ limit$),,,,,,],[$Book or Taxable income,,,,,,$]]$

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