XYZ is a calendar-year corporation that began business on January 1, 2017. For 2018, it reported the following information in its current year audited income statement. Notes with important tax information are provided below. 

Required:

Identify the book-to-tax adjustments for XYZ

a. Reconcile book income to taxable income and identify each book-tax difference as temporary or permanent.

b. Compute XYZ’s income tax liability.

c. Complete XYZ’s Schedule M-1.

d. Complete XYZ’s Form 1120, page 1 (the most current form available). Ignore estimated tax penalties when completing the form.

e. Determine the quarters for which XYZ is subject to underpayment of estimated taxes penalties (see estimated tax information below).