The Bowerman Warehouse Corporation (BWC) is organized in Oregon and operates 15 retail and grocery stores in several of the western US states. BWC is owned by a small group of private equity investors. BWC follows generally accepted accounting principles (GAAP). It uses the same fiscal year (June 30 year-end) for tax and book purposes. It is not subject to a state or federal alternative minimum tax this year, and it holds no minimum tax credits. BWC’s balance sheet shows the deferred tax assets and liabilities that were created in prior years. BWC’s CFO has asked for your assistance in generating information needed for the corporation’s financial statements. The financial accounting records of BWC for the current year produce the summarized trial balance (see below). Other information is available from last year’s tax file and supporting records. Follow all of the public company disclosure rules of ASC 740, without regard to materiality or significance. Additional InformationBWC’s CFO informs you that the company does not project that it will generate any additional net capital gains in the next five years. This fact jeopardizes the corporation’s ability to use its $75,000 capital loss carryforward before the five-year period expires. Management agrees to create a valuation allowance in the amount of 60 percent of the carryforward amount. BWC’s CFO is concerned that some of its current-year accelerated cost recovery will be disallowed after an IRS audit is completed. The BWC tax department has constructed the following table of the likely outcomes of the audit negotiations on this point:Total Cost Recovery Deduction, Probability of the Parties Agreeing to This Amount$350,000 10%$300,000 45%$250,000 35%$150,000 10%BWC’s delivery truck drivers were responsible for $50,000 in speeding tickets, all of which the company paid during the current year. Inventories are recorded using the LIFO (last-in-first-out) method of accounting. In addition, for tax purposes some expenses must be capitalized using the UNICAP rules. In the last fiscal year, $280,000 were capitalized for tax; in the current fiscal year, UNICAP amounted to $250,000. Assume that all inventory turns over more than once per year. BWC holds life insurance policies on its five officers. Premiums in the current year amounted to $200,000. No deaths occurred in the current year; thus, no life insurance proceeds were collected. BWC sold some of its business assets for a net gain of $95,000. Net book value of these assets was $1,160,000 at the time of the sale. For tax purposes, adjusted basis was $600,000.BWC contributed $1,000,000 to its defined benefit retirement plans, but due to carryovers $1,350,000 qualified for an income tax deduction in the current year. BWC’s tax department reported a $70,000 total of documented expenses for meals and entertainment. Interest income in the current year was $70,000 from corporate bonds and $15,000 from municipal bonds. BWC holds a $260,000 NOL carryforward, for both state and federal purposes. (BWC has elected to forego any federal NOL carryback. None of the states in which BWC holds an NOL allows a carryback at this time.)Of the accounts receivable $10,000 were written off in the current year. BWC accrued a current-year tax expense of $250,000 federal and $25,000 state. Statutory tax rates for BWC are 21% federal and 6% for the states (blended). Unless otherwise noted, state income tax laws piggyback onto federal income tax provisions in all states in which BWC has nexus. None of the states with which BWC has nexus allows a deduction for book federal income tax expense. Assume for the majority of this case (except requirement 8!) that the tax rate change for federal tax purposes from 34% to 21% does apply for the entire year. Requirements:(a) Using the information provided in the Trial Balance, compute book income before taxes for BWC. (3 points)(b) Identify and measure BWC’s book-tax differences. Classify each of the book-tax differences as temporary or permanent. (3 points)(c) Determine BWC’s total tax provision for the year (i. e., the "tax accrual"). (4 points)