SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
42nd Edition
ISBN: 9780357233306
Author: Maloney
Publisher: Cengage
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$ 232,000
2,320,000
24,200
208,800
348,000
46,400
52,200
18,200
11,600
34,800
63,000
28,200
48,400
359,600
Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after
taxes of $1,558,800. Timpanogos provided the following information relating to its 2022 activities:
Life insurance proceeds as a result of CEO's death
Revenue from sales (for both book and tax purposes)
Premiums paid on the key-person life insurance policies. The policies have no cash surrender value.
Charitable contributions
Cost of goods sold for book and tax purposes
Interest income on tax-exempt bonds
Interest paid on loan obtained to purchase tax-exempt bonds
Rental income payments received and earned in 2022
Rental income payments received in 2021 but earned in 2022
Rental income payments received in 2022 but not earned by year-end
Tax depreciation
Book Depreciation
Net capital loss
Federal income tax expense for books in 2022
Required:
a. Reconcile book income to taxable income for Timpanogos Incorporated. Be sure to start with book income and identify all of the
adjustments necessary to arrive at taxable income.
b. Identify each book-tax difference as either permanent (P) or temporary (T).
c. Complete Schedule M-1 for Timpanogos.
d. Compute Timpanogos Incorporated's tax liability.
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Transcribed Image Text:$ 232,000 2,320,000 24,200 208,800 348,000 46,400 52,200 18,200 11,600 34,800 63,000 28,200 48,400 359,600 Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2022, it reported financial statement income after taxes of $1,558,800. Timpanogos provided the following information relating to its 2022 activities: 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 2022 Rental income payments received in 2021 but earned in 2022 Rental income payments received in 2022 but not earned by year-end Tax depreciation Book Depreciation Net capital loss Federal income tax expense for books in 2022 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.
Description
Book Income
(Dr) Cr
Book-tax
adjustments
(Dr)
Permanent (P) or
Temporary (T)
Book-tax
adjustments
Cr
Permanent (P) or
Temporary (T)
Revenue from sales
Cost of goods sold
Gross profit
Other income:
Life insurance proceeds from CEO's death
Interest income on tax-exempt bonds
Rental income
Gross income
Expenses:
Interest paid to obtain tax-exempt bonds
Net capital loss
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 (Dr) Cr
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Transcribed Image Text:Description Book Income (Dr) Cr Book-tax adjustments (Dr) Permanent (P) or Temporary (T) Book-tax adjustments Cr Permanent (P) or Temporary (T) Revenue from sales Cost of goods sold Gross profit Other income: Life insurance proceeds from CEO's death Interest income on tax-exempt bonds Rental income Gross income Expenses: Interest paid to obtain tax-exempt bonds Net capital loss 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 (Dr) Cr
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