Form 1120 Case: Pradera, Inc. (not a real company, fill to learning purposes only). Pradera, Inc. is a for-profit company registered as a corporation, with employer social security number 66-2854378, incorporated on January 2, 1994. The address of this company is 90 Avenida Esperanza, San Juan, 00950. According to the company's books, there were the following items both at the beginning of the taxable year and at the end.

Balance item at the beginning of the year January 1 Balance at the end of the year December 31 Sales $15,000,000 Materials $1,000,000 1,500,000 Items in process 500,000 900,000 Finished items 10,000,000 12,000,000 Purchase of materials 500,000 Direct wages 1,000,000 Other direct costs 450,000 Operational expenses Salaries, commissions and bonuses to employees 2,000,000 Federal Social Security 620,000 Medical insurance 300,000 Insurance 150,000 Rent 30,000 Personal property tax 10,000 Tax on real property 10,000 Car expenses 50,000 Travel expenses 10,000 Professional services 150,000 Contributions to pension plans or other plans 50,000 Depreciation 15,000 Donations 50,000 Repairs 60,000 Marketing expenses 150,000

Other data: The company did a charity to a recognized non-profit entity for $5,000. In addition, an estimated $70,000 in contributions were paid during the year. The corporation, classified as a medium-sized company, obtained a $100,000 loan and bought a store for $80,000 on January 12 of the taxable year in which the return is filed. The store was sold for $110,000 on June 30 of the same year and had a sales expense of $5,000.