***DATA****Comprehensive Tax Return Problem. The Snap-It-Open Corporation incorporated and began operations on January 15, 2017. Its address is 3701 Commerce Drive, Baltimore, MD 23239. Its employer identification number is 69-7414447. It elects to file its initial tax return as a calendar-year corporation and uses the accrual method of accounting. It elects the FIFO method of inventory valuation.

Jason Sprull (SSN 333-33-3333) and Martin Winsock (SSN 555-55-5555) formed the business. They each contributed $250,000 cash for 50 percent of the 100,000 shares of $1 par value stock issued and outstanding.

The company was formed to assemble and market a unique, compact, snap-open umbrella and its business activity code is 339900. These umbrellas are sold to a variety of organizations as premiums. The company purchases the umbrella frames and several types of waterproof fabric for the umbrella material and covers from various manufacturers. It prints the organizations' advertising logos or other designs on the umbrella material and covers. It then assembles these on the umbrella frames for delivery to the customer along with the covers.

On January 16, the company placed in service two new machines that they had purchased for $250,000 each for printing and cutting the fabric for the umbrellas and two used umbrella assembly machines purchased for $200,000 each. The company obtained a bank loan of $750,000 secured by the machines. Jason and Martin were required to personally guarantee this loan that has an 8 percent annual interest rate on the unpaid balance. The first principal and interest payment of $160,000 is not due until January 16, 2018.

During the year, the company purchased $250,000 of fabric and $310,000 of umbrella frames. It returned one order of frames valued at $5,000 because of a defect in the snap-open mechanism and received a cash refund for that amount.

Both Jason and Martin work full-time in the business. Jason is the salesperson for the company and Martin manages the office and the printing and assembly operations. Each receives a salary of $60,000 per year. They have six employees with the following incomes for the year: $45,000 for an accountant; $21,000 for a receptionist; $28,000 for each of two print machine operators; and $25,000 for each of two assembly machine operators. There are no accrued salaries or taxes as of the end of the current year. FUTA taxes are assessed on the first $7,000 of wages at a rate of 6.0 percent.

By the end of the year, the company had $1,935,000 in umbrella sales, collected $1,430,000 on these sales, and paid the following expenses in cash:

Rent$190,000 Repairs and maintenance20,000 Utilities80,000 Taxes and licenses (excluding FICA and FUTA taxes)10,000 Health insurance16,000 Advertising40,000 Travel (excluding meals)20,000 Business meals15,000 Group term life insurance2,000

1. b. Complete Form 1120 and Form 4562 for Snap-It-Open Corporation using the following additional information. The corporation wrote off no bad debts for the year and it maximized its cost recovery deductions on the four machines purchased. Use the 2017 tax forms available from the IRS website at www.irs.gov.

****Requirement****

Complete Form 1120, including applicable schedules, for Snap-It-Open Corporation using the provided business and financial information, including the solution to Part a) and additional information provided in Part b) of Problem 71 in Chapter 10 of your textbook. Use the 2017 tax forms available from the IRS website at www.irs.gov. provide responses in the tax form, save as a pdf file, and submit. Do not submit hand-written responses.