Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2020 , it reported

Timpanogos Inc. is an accrual-method, calendar-year corporation. For 2020 , it reported financial statement income after taxes of $1,342,000. Timpanogos provided the following information relating to its 2020 activities:

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 for 2020.

Solutions

Expert Solution

SOLUTION:

Part a & Part b.

Explanation:

Timpanogos's taxable income is $1,521,000, computed as follows:

*[T] reflects temporary book-tax differences and [P] reflects permanent book-tax differences (see requirement.

Part c.

Explanation:

Timpanogos's Schedule M-1 is as follows:

Part d.

Explanation:

Timpanogos's tax liability is $319,410 ($1,521,000 *21%).

Timpanogos's tax liability is $319,410 ($1,521,000 *21%)

Junaid answered 1 year ago

Next > < Previous

Related Solutions

Timpanogos Inc. is an accrual-method calendar-year corporation. For the current year 2017, it reported financial statement...

Timpanogos Inc. is an accrual-method calendar-year corporation. For the current year 2017, it reported financial statement income after taxes of $1,552,000. Timpanogos provided the following information relating to its current year 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...

Timpanogos Inc. is an accrual-method calendar-year corporation. For 2018, it reported financial statement income after taxes...

Timpanogos Inc. is an accrual-method calendar-year corporation. For 2018, it reported financial statement income after taxes of $1,152,000. 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 Cost of goods sold for book and tax purposes 300,000 Interest income...

Timpanogos Inc. is an accrual-method calendar-year corporation. For 2017, it reported financial statement income after taxes...

Timpanogos Inc. is an accrual-method calendar-year corporation. For 2017, it reported financial statement income after taxes of $1,152,000. Timpanogos provided the following information relating to its 2017 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 Overhead costs that were expensed for book purposes but are included in...

Reliable Manufacturing, Inc. is a calendar year, accrual method C Corporation that is the business of...

Reliable Manufacturing, Inc. is a calendar year, accrual method C Corporation that is the business of manufacturing widgets. Its taxable income averages $2,000,000 each year. On June 1, 2010, Reliable Manufacturer purchased a new manufacturing building in Minneapolis for $2,500,00. The land was allocated $500,000 and the building was allocated $2,000,000 of the purchase price. The building will be placed in service immediately upon purchase. Reliable Manufacturer occupied the building from June 1, 2010 through October 29, 2017. Reliable Manufacturer...

Guard Inc., a calendar year C-Corporation, and accrual method taxpayer provide the following information to you...

Guard Inc., a calendar year C-Corporation, and accrual method taxpayer provide the following information to you and asks you to prepare a Schedule M-1. Complete the assignment using the actual Schedule M-1 form (for 1120 C-Corporation). Net Income per Book: $425,000 Tax Exempt Interest Income: $260 Federal Income Tax Paid: $10,000 Life Insurance Proceeds: $100,000 - (received upon death of key employee – the President) Excess Charitable Contribution $3,000 (paid $20,000, was only able to deduct $17,000 on current year...

Shimmer Inc. is a calendar-year-end, accrual-method corporation. This year, it sells the following long-term assets: Asset...

Shimmer Inc. is a calendar-year-end, accrual-method corporation. This year, it sells the following long-term assets: Asset Sales Price Cost Accumulated Depreciation Building $738,000 $723,000 $41,500 Sparkle Corporation stock 170,000 242,000 n/a Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $812,000. What are Shimmer's taxable income and tax liability for the year? (New Corporate income tax rate has been mentioned as "21% on all taxable income" as per the recent change.)...

Shimmer Inc. is a calendar-year-end, accrual-method corporation. This year, it sells the following long-term assets: Asset...

Shimmer Inc. is a calendar-year-end, accrual-method corporation. This year, it sells the following long-term assets: Asset Sales Price Cost Accumulated Depreciation Building $650,000 $642,000 $37,000 Sparkle Corporation stock 130,000 175,000 n/a Shimmer does not sell any other assets during the year, and its taxable income before these transactions is $800,000. What are Shimmer's taxable income and tax liability for the year? (New Corporate income tax rate has been mentioned as "21% on all taxable income" as per the recent change.)

Copier Choice Corporation (CCC) is a calendar year, accrual method, C corporation engaged in the business...

Copier Choice Corporation (CCC) is a calendar year, accrual method, C corporation engaged in the business of selling, leasing, and servicing copiers primarily to service businesses such as accounting and law firms. During the fourth quarter of 2017, CCC received the following two payments: -Service payment: CCC received a $375,000 fee for a 15-month service contract on 375 copiers sold be CCC in Oct of 2017 to a national law firm. Under the terms of the contract, CCC will provide...

Question Andersen Corporation, a calendar year, accrual method, C-Corporation, is in the business of manufacturing glass...

Question Andersen Corporation, a calendar year, accrual method, C-Corporation, is in the business of manufacturing glass based product. In 2018, Andersen Corporation had taxable income before any limitations of $500,000. Andersen Corporation’s had average annual gross receipts over the previous three tax years of $27,000,000. The following items of income and deductions are included in the computation of taxable income: · $400,000 interest expense · $250,000 depreciation · $30,000 interest income · $75,000 amortization · $100,000 research and development expenses...

Western Corporation, a calendar year, accrual basis corporation, reported $500,000 of net income after tax on...

Western Corporation, a calendar year, accrual basis corporation, reported $500,000 of net income after tax on its 2019 financial statements prepared in accordance with GAAP. The corporation’s books and records reveal the following information: Western’s book income included $15,000 of dividends, received from a domestic corporation in which Western owns less than 1 percent of the outstanding stock. Western’s depreciation expense per books was $55,000, and its MACRS depreciation was $70,000. Western earned $5,000 of interest from municipal bonds and...

Subjects