Can I have please have some help with this assignment, I am getting it all wrong.

Determine Adjusted Book Income: 1 2 3 4 5 You are provided with the unadjusted trial balance (Microsoft Excel) and your manager's meeting notes and questions (Microsoft Word) for your new tax client - Phoenix Medical. Following the notes, modify the unadjusted trial balance to generate a trial balance work paper (in Microsoft Excel) that includes: a Adjusting Journal Entries b Adjusted Book Income c Tax Journal Entries d Taxable Income e Answers to your manager's questions (Microsoft Word or Excel). The client depends on you, the CPA, to provide journal entries for activity in fixed assets. While discussing fixed assets, the client divulges that he got a great deal to upgrade his laser dermatology equipment. Ultimately, you find out that $569,888 of new equipment was purchased and placed in service on 6/18/2015. Furthermore, and much after the fact, you discover that old medical equipment was sold to an unrelated party for $75,000 cash. The original cost of the equipment was $300,000 and it was fully depreciated (no Sec. 179). The cash was deposited in one of the shareholders personal accounts. a Provide a journal entry to calculate the gain on sale and adjust the fixed asset and accumulated depreciation accounts. b What is the nature of this gain? c Could the Dr. have structured this sale in an unusual way to avoid taxable income? How? The client depends on his accountant to provide a journal entry for the annual depreciation expense. They have adopted a policy of treating book depreciation equal to tax depreciation. Depreciation expense for the year will include: a Depreciation on assets placed in service prior to 2015 is: $86,769 b Maximize Sec. 179 expense on assets placed in service in 2015. c Take Sec. 168(k) - 50% Bonus - on new equipment if applicable. Determine Taxable Income: 1. Determine taxable income. Show all adjustments in the Microsoft Excel spreadsheet. Footnote references are provided to assist you. 2. The Dr. has filed his prior tax returns on the cash basis. a. What questions will you ask to be sure he can continue to file on the cash basis? 3. You find that in 2015, the Dr. qualifies, and choose to file on the cash basis. His books are kept on the accrual basis. Determine the adjustments needed. 4. No federal taxes were paid in 2014, and no estimated taxes were paid in 2015. 5. Within the state tax expense, you find $4,389 is late payment penalties. 6. While analyzing the financial information, you find that hidden in \"Accounts Payable\" is $28,953 of accrued salaries. You also find that the salaries were paid in the first week of February. a. Does this have an impact on taxable income? 7. Determine the accrual to cash adjustments for accounts receivable and accounts payable. a. A charitable contribution carryforward of $40,000 is available. b. Included in insurance expense is $12,523 of officers' life insurance. You determine the company is the beneficiary, and each officer is a greater than 20% shareholder. Supplemental information for Phoenix Medical, Inc. Calendar year ending 12/31/2015: Page 1 Information: Company Name: B. C. Phoenix Medical, Inc. 1122 Three Ave. Phoenix, AZ 85001 EIN: 24-5678901 Date Incorporated: 3/27/2006 Page 2 Information: 1. Dividends were received from Big Labs. Phoenix Medical holds a 15% ownership of Big Labs. Schedule K Information: Line 2. a. Business Activity Code: 621111 b. Business Activity: Medical c. Product or Services: Skin Care Line 3. Not a subsidiary. Line 4. a. Not owned by a foreign or domestic entity. b. Owned equally by three individuals (33.33%). Line 5. Not an owner of 20% or more of a foreign or domestic corporation or partnership. Line 6-11. No. Line 12. NOL carryforward of $1,535,624 is available to offset 2015 income. Line 13 & 14. No. Line 15. Yes and Yes. Line 16-18. No. Phoenix Medical 7:08 AM 11/04/15 Accrual Basis Balance Sheet As of December 31, 2014 Dec 31, 15 Dec 31, 14 $ Change ASSETS Current Assets Checking/Savings 10001 Checking 609,842.00 277,131.00 332,711.00 10010 Savings 557,392.23 325,541.23 231,851.00 10020 Cash Maximizer 558,380.05 69,672.05 488,708.00 1,725,614.28 672,344.28 1,053,270.00 260,990.00 826,113.00 -565,123.00 260,990.00 826,113.00 -565,123.00 75,000.00 0.00 75,000.00 75,000.00 0.00 75,000.00 2,061,604.28 1,498,457.28 563,147.00 15000 Furniture and Equipment 40,316.00 40,316.00 0.00 15500 Leasehold Improvements 506,889.00 506,889.00 0.00 1,399,776.00 1,129,888.00 269,888.00 -1,568,773.00 -1,240,071.00 -328,702.00 378,208.00 437,022.00 -58,814.00 3,206,518.00 2,306,518.00 900,000.00 866,507.20 364,352.20 502,155.00 4,073,025.20 6,512,837.48 2,670,870.20 4,606,349.48 1,402,155.00 1,906,488.00 122,601.00 107,245.00 15,356.00 122,601.00 107,245.00 15,356.00 39,065.51 34,742.51 4,323.00 39,065.51 34,742.51 4,323.00 0.00 26,375.00 -26,375.00 Total Checking/Savings Accounts Receivable 11000 Accounts Receivable Total Accounts Receivable Other Current Assets 18100 Loan to Shareholder Total Other Current Assets Total Current Assets Fixed Assets 16100 Medical Equipment 17000 Accumulated Depreciation Total Fixed Assets Other Assets 18001 Investment in Big Labs 18050 Investment in R&D Company Total Other Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 20001 Accounts Payable Total Accounts Payable Credit Cards 20100 Credit Cards Total Credit Cards Other Current Liabilities 20200 Accrued Salaries Total Other Current Liabilities 0.00 26,375.00 -26,375.00 161,666.51 168,362.51 -6,696.00 28001 Business Loan 1,207,401.72 1,333,423.72 -126,022.00 Total Long Term Liabilities 1,207,401.72 1,333,423.72 -126,022.00 1,369,068.23 1,501,786.23 -132,718.00 Total Current Liabilities Long Term Liabilities Total Liabilities Page 2 of 7 7:08 AM 11/04/15 Accrual Basis Phoenix Medical Balance Sheet As of December 31, 2014 Dec 31, 15 Dec 31, 14 $ Change Equity 30100 Capital Stock 1,000.00 1,000.00 0.00 -400,000.00 0.00 -400,000.00 32000 Retained Earnings 3,103,563.25 3,103,563.25 0.00 Net Income 2,439,206.00 0.00 2,439,206.00 Total Equity TOTAL LIABILITIES & EQUITY 5,143,769.25 6,512,837.48 3,104,563.25 4,606,349.48 2,039,206.00 1,906,488.00 31400 Shareholder Distributions Page 3 of 7 Phoenix Medical 7:09 AM 11/04/15 Accrual Basis Profit & Loss January through December 2014 Jan - Dec 15 Ordinary Income/Expense Income 43700 Fee for Service Income 47300 Refunds Total Income 5,615,706.00 -17,633.00 5,598,073.00 Expense 60000 Advertising and Promotion 60200 Automobile Expense 1,252.00 11,961.00 60400 Bank Service Charges 8,808.00 61000 Business Licenses and Permits 5,611.00 61100 Charitable Contributions (Cash) 100,000.00 61700 Computer and Internet Expenses 13,575.00 62400 Depreciation Expense 62500 Dues and Subscriptions 628,702.00 8,327.00 62600 Equipment Rental 62610 Laser Facility Rent 62600 Equipment Rental - Other Total 62600 Equipment Rental 63300 Insurance Expense 63400 Interest Expense 14,979.00 201,106.00 216,085.00 55,356.00 63,678.00 63600 Laboratory Testing Fees 121,653.00 64300 Meals and Entertainment 8,362.50 64400 Medical Records and Supplies 103,456.00 66700 Professional Fees 123,945.00 67200 Repairs and Maintenance 18,855.00 67800 Salaries and Wages 67810 Officers Compensation 940,000.00 67800 Salaries and Wages - Other 321,580.00 Total 67800 Salaries and Wages 1,261,580.00 68000 Taxes 68010 Payroll Taxes 68020 State Tax Total 68000 Taxes 206,103.00 30,652.00 236,755.00 68500 Uniforms 16,121.00 68600 Utilities 30,364.00 Total Expense Net Ordinary Income 3,034,446.50 2,563,626.50 Other Income/Expense Other Income 70200 Interest Income 70222 Tax Exempt Interest 70300 Sublease Rents 71000 Dividends 833.00 0.00 240,000.00 80,000.00 Page 4 of 7 7:09 AM 11/04/15 Accrual Basis Phoenix Medical Profit & Loss January through December 2014 Jan - Dec 15 75000 Gain on Sale of Assets Total Other Income 75,000.00 395,833.00 Other Expense M-1 AC M-1 Accrual to Cash Adjustment Total Other Expense Net Other Income Net Income 13,597.00 13,597.00 382,236.00 2,945,862.50 Schedule M-1 Line 10 Page 5 of 7 Phoenix Medical 12:55 PM 10/26/15 Accrual Basis Profit & Loss January through December 2014 Jan - Dec 15 Ordinary Income/Expense Income 43700 Fee for Service Income 47300 Refunds Total Income 5,050,583.00 -17,633.00 5,032,950.00 Expense 60000 Advertising and Promotion 60200 Automobile Expense 1,252.00 11,961.00 60400 Bank Service Charges 8,808.00 61000 Business Licenses and Permits 5,611.00 61100 Charitable Contributions (Cash) 60,000.00 61700 Computer and Internet Expenses 62400 Depreciation Expense 62500 Dues and Subscriptions 13,575.00 628,702.00 8,327.00 62600 Equipment Rental 62610 Laser Facility Rent 62600 Equipment Rental - Other Total 62600 Equipment Rental 63300 Insurance Expense 63400 Interest Expense 14,979.00 201,106.00 216,085.00 55,356.00 63,678.00 63600 Laboratory Testing Fees 121,653.00 64300 Meals and Entertainment 16,725.00 64400 Medical Records and Supplies 103,456.00 66700 Professional Fees 123,945.00 67200 Repairs and Maintenance 18,855.00 67800 Salaries and Wages 67810 Officer Compensation 940,000.00 67800 Salaries and Wages - Other 321,580.00 Total 67800 Salaries and Wages 1,261,580.00 68000 Taxes 68010 Payroll Taxes 68020 State Tax Total 68000 Taxes 68500 Uniforms 68600 Utilities Total Expense Net Ordinary Income 206,103.00 35,041.00 241,144.00 16,121.00 30,364.00 3,007,198.00 2,025,752.00 Other Income/Expense Other Income 70200 Interest Income 70222 Tax Exempt Interest 70300 Sublease Rents 833.00 17,621.00 240,000.00 12:55 PM 10/26/15 Accrual Basis Phoenix Medical Profit & Loss January through December 2014 Jan - Dec 15 71000 Dividends 80,000.00 75000 Gain on Sale of Assets 75,000.00 Total Other Income Net Other Income Net Income INFORMATION ONLY - NOT TO INPUT. 413,454.00 413,454.00 2,439,206.00 Schedule M-1 Line 1