The Outdoor Man, a calendar year, accural based corporation, reported $1 million of net income after tax on its financial statements prepared in accordance with U.S. Generally Accepted Accounting principles. The corporation's books and records show the following:
Outdoor Man's federal income tax expense per books was $400,000.
Outdoor Man recorded $8,000 of meals and entertainment costs.
Outdoor Man earned $1,000 of municipal bond interest income.
Outdoor Man's depreciation expense for book purposes was $25,000. Tax MACRS depreciation was $40,000.
a. Using the Corporate Rate Schedule provided, compute their taxable income and income tax.
b. List the temporary items
c. List the permanent items