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Item 1

Comprehensive Problem 13-82 (LO 13-1, LO 13-2, LO 13-3, LO 13-4) (Algo)

Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,531,700. Timpanogos provided the following information relating to its 2022 activities:

Life insurance proceeds as a result of CEO's death	$ 228,000
Revenue from sales (for both book and tax purposes)	2,280,000
Premiums paid on the key-person life insurance policies. The policies have no cash surrender value.	23,800
Charitable contributions	205,200
Cost of goods sold for book and tax purposes	342,000
Interest income on tax-exempt bonds	45,600
Interest paid on loan obtained to purchase tax-exempt bonds	51,300
Rental income payments received and earned in 2022	17,800
Rental income payments received in 2021 but earned in 2022	11,400
Rental income payments received in 2022 but not earned by year-end	34,200
Tax depreciation	62,000
Book Depreciation	27,800
Net capital loss	47,600
Federal income tax expense for books in 2022	353,400

Required:

1. 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.