Anti Virus Inc was formed in early 2019, funded by some venture capitalists who owns 90% of the company stock and the other 10% is owned by the top five officers of the Corporation (each hold 2%).

AVI rents the basement in the Trump Hotel 1100 Pennsylvania Ave NW Washington, DC 20001 is the address for the headquarters of AVI, which was incorporated in Delaware, on 1/1/2019 and the EIN# is 54-3516549.

AVI somehow was tipped off to the potential for a catastrophic virus that was rumored to be causing early stage havoc in China. They act as a distributor of tests to check this virus. They have a number of suppliers in India and Russia for these test packets. AVI buys from their suppliers and sells throughout the USA. Business began to boom. They hold almost NO INVENTORY they just act as the middleman. They want us to do their tax return for 2019. Heres what they gave me for their 2019 first year of operations:

Financial Statement:

Gross Sales $150 million

Cost of Sales $80 million

Selling and Marketing costs $50 million

Administrative costs $10 million

Interest income $1 million

Dividend Income $2 million (small 10% investment in TRUMP CORP)

Net Profit Pre Tax is $13 million

Tax per Books was 2 million

Net profit after tax was $11 million

Breakdown of expenses:

Selling and marketing costs Bribes to Local Hospital Officials $1 million

Bribes to 4 US Senators $2 million (each guy got $500,000 for helping AVI become the leading supplier of virus tests!)

Bribes to the suppliers in India and Russia were $20 million in total! (these suppliers WERE going to sell to the Chinese UNTIL AVI saved the day and got them to supply the USA it just took a little payola!).

Fine levied by the US government against AVI was $15 million under the Foreign Corrupt Practice Act for bribing those foreign countries! Ughh!

Advertising costs - $5,000,000

Sales commissions to employees - $1,500,000

Salaries to salespeople - $5 million

Depreciation 100% bonus depreciation was taken on the SUPER ANTIVIRUS VEHICLES used to deliver the test kits. This depreciation for tax was $2,500,000, the costs of these vehicles. For book purposes $500,000 of depreciation expense was recorded since the company estimated a 5 year life on these assets that cost $2.5 million.

Administration costs: included in the $10 million are

Officer Comp $5 million (each officer got $1 million!)

Fringe benefits - $1 million

Pensions, etc - $1 million

Other salaries $1 million

Entertainment $500,000

Meals $200,000 (assume 1/2 of these meals can be deducted for tax purposes)

Rental of Building Headquarters $300,000

Donations to various universities (keep those professors happy!) - $200,000

State tax expenses $300,000

Start up costs $180,000

Miscellaneous other costs - $320,000.

Breakdown of Other things?

The interest income of $1 million included $500,000 from an investment in State of California Bonds and another $400,000 from investment in State of New York Bonds. The balance of $100,000 was interest received from an investment into a Russian Bank.

Also, they told me they paid a $5 million dividend - $4.5 to the VC company and the remaining $500,000 was paid $100,000 to each of the 5 officers. Paid on Christmas day 12/25/2019. The VC company was based in South Korea, by the way. The VC company was funded significantly by Banco De Milano (75% investment; the other 25% of the VC was held by businessmen in Hong Cong), based of course in Italy.

Finally THEY PAID NO TAX to the FEDERAL GOVERNMENT in the USA at least not YET! BUT they did pay that state tax I mentioned above! (I think they would be granted a federal tax exemption by their friends in Congress sort of like a bail out!)

THATS ALL I GOT FOR NOW !

Use this data and the excel spreadsheet (if you want as a guide) to answer and complete the following:
Complete the Schedule M-1 Complete an 1120 Tax Return Tell me what number you get for Line 28 Tell me what number you get for Line 30 Tell me whether you have balance due or overpayment