From the information provided in the attachment, prepare Scuba View, Inc.'s 2014 Federal income tax return (Form 1120), including all needed supporting statements, schedules, and forms. Unless otherwise noted, assume Scuba View, Inc. follows the policies of making all elections to minimize its current income taxes and, to the extent possible, of conforming procedures for financial and tax accounting. Round amounts to the nearest dollar. If additional information is needed, make realistic assumptions and fill in all required data. The forms that you will need to complete include Forms 1120, 1125-A, 1125-E, 4626, Schedule D and Schedule G. These forms can be found at http://apps.irs.gov/app/picklist/list/formsPublications.html. You will complete these forms in the PDF format. Thanks for any/all help!!!

CORPORATION PRACTICE SET Scuba View, Inc Federal Tax Return FACTS Scuba View, Inc. is owned by Ronald C. Fisher and his wife, Nancy A. Fisher. The corporation manufactures snorkel masks with built-in lighting systems used for general underwater lighting. When cut in a special way, the lights flash rapidly indicating an emergency situations (business activity code number 339900). The corporation has reported positive financial and taxable incomes since inception. The company is located at 150 Reef Road, Big Sur, CA 93920. The company's employer identification number is 98-7654321, and the calendar year is used for tax purposes. The date of incorporation was February 9, 2005. Ronald C Fisher (social security number 111-11-1111) is an 80 percent shareholder and president of the company. Nancy A Fisher (social security number 123-45-6789) is a 20 percent shareholder and vice president of the company. Both persons devote 100 percent of their time to the corporation. Ronald's compensation is $153,695 per year, and Nancy's compensation is $85,387 per year. The corporation is not a personal holding company. While the corporation is a 'closely-held C corporation,' it does not engage in activities to which the at-risk or passive activity loss limitations apply. The corporation files its tax return on the accrual method. Inventory has been consistently valued at Cost under the FIFO method using the full absorption procedure. Inventory capitalization rules of Internal Revenue Code Section 263A do not apply due to the 'small business exception' (average annual gross receipts for the three preceding taxable years do not exceed $10 million). The accounting records are computerized. ADDITIONAL INFORMATION 1. Scuba View, Inc. made estimated tax payments attributable to 2014 of $13,176. The corporation also had a credit from an overpayment of its prior year Federal income taxes of $1,824 that it elected to apply against its 2014 tax liability. Apply any overpayment to 2015. 2. Ignore state income taxes. 3. Dividend income is from the following sources: General Motors.(owns less than 20% of all outstanding stock).................. IBM Corp.(owns less than 20% of all outstanding stock) ........................ Voltage, Inc. (Scuba View, Inc. owns 25% of Voltage's stock) .............. Total ...................................................................................................... $ 2,450 3,120 48,630 $54,200 4. An analysis of the Allowance for Doubtful Accounts reveals: Balance, 01/01/14 ...................................................................................................... $43,765 2014 Transactions-Provision for bad debts ............................................................................... 3,416 Recoveries of bad debts .............................................................................. -0Accounts written off as uncollectible ......................................................... (877) Balance, 12/31/14 ................................................................................. $46,304 5. Goodwill of $54,850 arose on purchase of another business on 06/15/12. Amortization is not being taken for financial purposes. 6. Assume that deductions for tax depreciation (i.e., Modified Accelerated Cost Recovery) for the year total $155,874. For this practice set do not complete Form 4562 (Depreciation and Amortization). 7. $113,787 of the Accrued Wages as of 12/31/13 were paid by 3/15/14. $142,850 of the Accrued Wages as of 12/31/14 were paid by 3/15/15. The M-1 should be adjusted through the Wage Expense. 8. Contributions included: Wildlife Federation ..................................................................................... Committee to Elect Joe Black, Governor................................................... Big Sur Food Bank ...................................................................................... Total ...................................................................................................... $5,789 2,000 1,745 $9,534 All contributions were paid in cash during the year except for the Food Bank contribution which was pledged by the corporation (i.e., approved by the Board of Directors) on December 2 7, 2014 and paid on March 24, 2015. In addition to the cash contributions above Scuba View, Inc. donated inventory to a local charity. The fair market value of the inventory was 1,750 and the cost basis was 1,450. 9. Included in interest income is $1,010 from Sacramento, CA General Obligation Bonds held throughout the current year. These bonds are included in the marketable securities account. 10. On 11/01/14 the corporation sold 300 shares of Voltage, Inc. common stock for $7,945. The stock had been purchased on 2/09/10 for $10,056. 11. Form 4626 (Alternative Minimum Tax-Corporations) must be included in the return. For that purpose, assume the adjustment for depreciation of tangible property placed in service after 1986 (Form 4626, Line 2a) is a $41,898 positive adjustment. Assume the Adjusted Current Earnings (ACE) Adjustment on Line 4e is $-0-. [This assumption removes the ACE adjustment from this practice set]. 12. Disregard any penalty on underpayment of estimated tax. f 13. Assume that compensation of officers and other salaries and wages do not relate to production activities. This assumption removes the Domestic Production Activities deduction from this practice set. REQUIRED From the above information, prepare Scuba View, Inc.'s 2014 Federal income tax return (Form 1120), including all needed supporting statements, schedules, and forms. Unless otherwise noted, assume Scuba View, Inc. follows the policies of making all elections to minimize its current income taxes and, to the extent possible, of conforming procedures for financial and tax accounting. Round amounts to the nearest dollar. If additional information is needed, make realistic assumptions and fill in all required data. The forms that you will need to complete include Forms 1120, 1125-A, 1125-E, 4626, Schedule D and Schedule G. These forms can be found at http://apps.irs.gov/app/picklist/list/formsPublications.html. You will complete these forms in the PDF format. Just type or neatly write in the amounts on the various lines and then print those forms off when complete. I will not accept electronic documents. Instructions to the Forms can be very beneficial in the preparation of the tax forms. The corporation's audited income statement and balance sheet for the current year, prepared by the accounting firm of Bering Beaufort, CPA's follows: SCUBA VIEW, INC. BALANCE SHEET For the Year Ending December 31, 2014 Beginning of Year ASSETS Current Assets: Cash & Marketable Securities Accounts Receivables Allowance for Doubtful Accounts Inventory Total Current Assets Machinery, Building and Land: Machinery Less: Accumulated Depreciation Building Less: Accumulated Depreciation Land Total Equipment, Building and Land $ 502,356 242,582 (43,765) 555,830 1,257,003 $ 487,595 273,727 (46,304) 672,888 1,387,906 $ 659,874 (102,464) 1,174,799 (195,598) 155,487 1,692,098 $ 751,660 (196,547) 1,174,799 (249,406) 155,487 1,635,993 $ Other Assets: Goodwill TOTAL ASSETS LIABILITIES AND SHAREHOLDER EQUITY Current Liabilities: Accounts Payable Accrued Wages Note Payable (less than one year) Total Current Liabilities Notes Payable (one year or more) Total Liabilities Common Stock (200,000 shares authorized, 19,702 shares issued and outstanding, $10 par) Additional Paid in Capital Retained Earnings Total Shareholders' Equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Ending of Year $ 54,850 54,850 $ 3,003,951 $ 3,078,749 $ $ $ $ $ 218,930 145,784 175,895 540,609 $ 235,556 152,500 155,402 543,458 $ 682,463 1,223,072 $ 738,399 1,281,857 $ $ 216,500 1,256,000 308,379 1,780,879 $ $ 216,500 1,256,000 324,392 1,796,892 $ 3,003,951 $ 3,078,749 The corporation's audited income statement and balance sheet for the current year, prepared by the accounting firm of Bering Beaufort, CPA's follows: STATEMENT OF RETAINED EARNINGS Beginning Retained Earnings Net Income for the Year Dividend Paid in Cash Ending Retained Earnings $ $ 308,379 106,724 (90,711) 324,392 The corporation's audited income statement and balance sheet for the current year, prepared by the accounting firm of Bering Beaufort, CPA's follows: SCUBA VIEW, INC. INCOME STATEMENT For the Year Ending December 31, 2014 Revenue: Sales Returns & Allowance Net Sales Purchases Gross Profits Operating Expenses Officer Wages Wage Expense Rent Expense Interest Expense Penalty Expense Advertising Expense Contributions Bad Debt Expense Depreciation Expense Officer's Life Insurance Premiums Payroll Taxes Repairs and Maintenance Meals & Entertainment Miscellaneous Expense Total Operating Expenses Net Income from Operations Other Income and Loss: Dividend Income Interest Income Loss on the Sale of Stock Net Income (Loss) before Income Tax Federal Income Tax Expense Net Income $ 6,859,819 (42,895) 6,816,924 (5,574,143) $ $ $ $ $ 1,242,781 (1,179,663) 63,118 239,082 525,921 36,033 91,165 2,903 9,187 9,534 3,416 147,891 9,541 76,500 7,696 3,688 17,106 54,200 3,517 (2,111) 55,606 $ $ 118,724 (12,000) 106,724