I desperately need help with this Corporate tax return problem. If anyone could help, the attachment is downloaded below

Introduction to Federal Income Tax Accounting 4550-001 Summer 2013 Tax Return Project 2 - Corporation Income Tax Return 50 Points Instructions Prepare a 2012 Form 1120 - U.S. Corporation Income Tax Return - for Mike's Music Corporation that is both professional in appearance and technically correct. The use of tax software or a professional tax preparer to complete this project is prohibited. You can access fill-in forms (in pdf format) on the IRS website (www.irs.gov). The tax return you submit for a grade must be submitted by the deadline and completed online/printed out. Handwritten tax forms and/or late submittals are unacceptable. Complete and attach the cover sheet I have provided to your completed tax project. A hardcopy of your cover sheet and return must be turned in on or before the beginning of class on Tuesday, August 13, 2013. The objective of this project is to enhance your understanding of the Internal Revenue Code rules as they relate to the corporate taxpayer through practical application. After you have tried to the best of your ability to resolve any questions you have on your own, you are welcome to contact me with specific questions. The learning experience can be enhanced if students are allowed to resolve a few relatively minor issues among themselves. However, the objective can only be achieved if each student substantially completes his/her own project. Examples of student collaboration that are not acceptable include, but are not limited to: Working together as a group of two or more students to prepare a single tax return and making copies for each student to submit, or Coordinating with one or more students to determine what should be entered on numerous lines of the tax forms/schedules so that it appears that a single return was prepared and copied. Additional instructions: Prepare the return as if you are preparing it for an actual client. All necessary supporting schedules (other deductions, etc.) are required. You are not required to complete and attach Form 4562 (Depreciation), or Form 8903 (Domestic Production Activities Deduction) for this project. Although you are not required to attach Form 8903 to the return, you are required to calculate the domestic production activities deduction and include the deduction in the return. I strongly suggest that you begin by using Excel to calculate both GAAP net income and taxable income noting the differences between the two calculations. This will essentially provide you with the numbers you need to complete Schedule M-1 on page 5 of Form 1120. The M-1 requires you to reconcile GAAP net income to taxable income. Client Information Mike's Music Corporation, incorporated on February 1, 2007, is a calendar year taxpayer that uses the accrual method of accounting. Its employer identification number is 645567587. Mike's Music Corporation manufactures and sells custom made musical instruments at retail in Murfreesboro, Tennessee. Mike's Music Corporation operates under the number \"Mike's Music Store.\" Its address is 320 Music Street, Murfreesboro, Tennessee, 37132. Mike Madison (Social Security number 444-22-3434) owns 100% of the stock of Mike's Music Corporation, and devotes 100% of his time to the business. Mike resides at 423 Middle Street, Murfreesboro, TN 37132. Mike received $120,000 in salary for serving as president of Mike's Music Corporation in 2012. Mike's Music Corporation has been very successful the last few years. As a result, the corporation declared and paid a $340,000 dividend in 2012. Mike received this dividend on October 15, 2012. Mike's Music Corporation qualifies for the domestic production activities deduction. Assume that Mike's taxable income equals its qualified production activities income and that all W-2 wages are attributable to qualified production activities. You are required to calculate the domestic production activities deduction for this project, but aren't required to complete Form 8903 (you would be required to attach a properly completed Form 8903 to an actual return). Mike's Music Corporation uses the accrual method of accounting for its inventory for both financial accounting and tax. Mike's Music Corporation uses the cost method for valuing inventory. It is not subject to the provisions of 263A and did not change its inventory accounting method during the year. Mike's Music Corporation made $564,100 of purchases in 2012. No other costs are allocated to cost of goods sold. Mike's Music Corporation classifies all employee salaries as an ordinary expense (instead of part of cost of goods sold). Mike's Music Corporation does not claim any deduction for expenses connected with entertainment facilities, living accommodations, or employees attending foreign conventions. It is not eligible for the U.S. Production activities deduction. No NOL carryovers are available from prior tax years. Mike's Music Corporation's 2012 book income is $473,455, consisting of net income per books before taxes of $675,000 minus federal income tax expense per books of $201,545 (this is federal income tax expense per books, not federal income tax payable). You should be able to calculate Mike's book income based on the information set forth below. Mike's Music Corporation reported the following revenue and expense items in 2012: Revenues and Cash Inflow: Gross receipts Dividend received (from an investment in a 2% owned domestic corporation) Interest income from corporate bonds Interest income from state of Tennessee bonds Expenses and Cash Outflows Cash Outflow: Purchases Salaries: Officers Other employees Rent on store building Bad debt expense Payroll, Property and State Income Taxes Interest payments on business loan Depreciation (book depreciation) Advertising Meals and Entertainment Employee benefit programs Utilities Repairs and maintenance Officer's life insurance premium (Mike's Music Corporation is the beneficiary) Office expense Fines and Penalties Dividend (Mike's Music Corporation declared and paid a $340,000 dividend on October 15, 2012 1,568,400 40,000 2,000 1,200 564,100 120,000 70,000 48,000 400 14,000 17,100 38,000 20,000 6,000 9.000 13,200 7,000 1,200 5,400 1,000 340,000 Mike's Music Corporation uses the allowance method of accounting for bad debts in calculating its book income. It made the following adjustments to its allowance for bad debts in 2012: January 1 allowance for bad debts Actual write-offs of accounts receivable Addition to allowance at year-end December 31 allowance for bad debts 800 (500) 400 700 Book depreciation is $38,000. Mike's Music Corporation uses MACRS depreciation for tax purposes. Mike's Music's 2012 tax depreciation is $42,000. You are not required to complete Form 4562 (Deprecation and Amortization) for this project. Mike's Music Corporation's 2011 federal income tax liability was $200,000. In order to avoid a penalty for underpayment of estimated tax, Mike's Music Corporation based their 2012 estimated tax payments on last year's liability and made four quarterly estimated tax payments of $50,000 each (total of $200,000) on April 15, June 15, September 15, and December 15 of 2011. An overpayment of 2012 taxes (if any) should be applied to Mike's Music Corporation's 2013 estimated payments. Mike's Music Corporation's GAAP balance sheet is set forth below. Assets Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Other Assets Investments (including $20,000 of State of TN bonds) Depreciable assets Minus: Accumulated depreciation Total assets January 1, 2012 $ 58,728 14,000 (800) 87,800 272 100,000 500,000 (270,000) $490,000 December 31,2012 $ 90,362 13,500 (700) 85,600 238 152,000 500,000 (308,000) $533,000 Liabilities and Stockholder's Equity Accounts Payable Long-Term Liabilities (mortgage due in 1 year or more) Other Liabilities Common Stock Retained Earnings (unappropriated) Total liabilities and equity January 1, 2012 $ 60,000 200,000 -020,000 210,000 $490,000 December 31, 2012 $ 29,034 139,000 1,511 20,000 343,455 $ 533,000