Franks Music, Inc., 37-1415259, 1706 Lincoln Ave., Normal, IL 61761, a cash basis corporation, needs to file a corporate tax return for 2019. Franks sell musical instruments. Franks has 25 stockholders. The largest are the president of the company, Frank Holmes (15%) (323-33-4224), his wife Jane (15%) (368-34-4433), daughter Judy (15%) (388-33-2424) and his boy Elroy (15%) (388-39-4224). They all live in Normal. The remaining stockholders are employee, none of the whom own more than 5% of the stock, are officers, or all are unrelated to the Holmes family. None of the stockholders own stock in any other companies.

Franks Music had the following:

Sales $525,000

Beginning Inventory $ 28,000

Purchases $273,000

Ending inventory $ 42,000

Salaries $143,000

Rent $ 24,000

Utilities $ 11,000

Charitable contribution $ 18,000

Depreciation $ 16,000

Taxes $ 12,000

Salaries included $55,000 paid to Frank. 100% of Franks employment is being the manager of Franks Music.

The company also received $10,000 in dividends from a variety of investments they have, none of which do they own more than 20% of the company.

Prepare pages 1-4 of the Form 1120, and the supporting schedules necessary for the numbers you have entered. Cost method FIFO inventory is used, and there were no write-downs of Subnormal goods, changes in valuation of beginning and ending inventories, or applications necessary of section 263A rules.

They didnt make any estimated payments during the year. They had a $10,500 refund that carried over from last year.

The tax rate is 21%.