I have the following completed: 1120, 2220,1125 A , 1125 E

I need the following forms completed asap:SCHEDULE D and G

form 4562, form 4797 schedule detail M-1

it should be fairly easy to do the rest of the forms since everything on my form 1120 is CORRECT......

ACC 180 - CASE 1 (C:3-66) GRADING RUBRIC SPR 16 NAME: Item FORM 1120 - PAGE 1 FORM 1120 - PAGE 2 FORM 1120 - PAGE 3 FORM 1120 - PAGE 4 FORM 1120 - PAGE 5 FORM 1125-A SCHEDULE D SCHEDULE G FOM 1125-E FORM 2220 FORM 4562 FORM 4797 OTHER DEDUCTIONS SCHEDULE SCHEDULE L DETAIL SCHEDULE M-1 RECONCILIATION 168(K) BONUS DEPR. NON-ELECTION FORM COMPLETION SUBMITTED? PERCENTAGE POINT REDUCTION 0.00 GRADING POINT DISTRIBUTION: FORMS SUBMISSION COMPLETION ACCURACY ** Total Available Points: 50 POSSIBLE 20.00% 40.00% 40.00% 100.00% EARNED 0.00% SCORE: 0.00 COMMENTS ACC 180 Corporate Case 1 Instructions - SPR 16 Problem: C: 3-66 (Melodic Musical Sales, Inc.) Pages 157 - 160 Point Value: 50 Due Date: Monday - March 7, 2016 (11:59 pm) Preparing Form 1120 - Some General Comments: Page one of Form 1120 is used to report the corporate taxpayer's income and expenses. In a sense, it may be thought of as an \"Income Statement,\" but one that is based on tax laws, not GAAP. Table C: 5 (page 159) shows the company's 'book' or 'financial' income, and is the starting point for completing Page 1 of Form 1120. Many of the income and expenses reported on the company's books will be reported on the tax return at the same amounts. However, tax laws do not always agree with GAAP so differences will exist. A good example of such a difference is depreciation. GAAP generally does not recognize MACRS as an acceptable method of depreciation. Schedule L is the Balance Sheet. You will use the information provided in Table C: 4 to complete Schedule L. However, Table C: 4 is actually a Trial Balance - not a Balance Sheet. The Total Assets and Total Liabilities and Shareholders' Equity on Schedule L will NOT equal the totals in the table. Beginning and ending Total Assets are provided later in these instructions under the \"Schedule L\" topic. Schedule M-1 is used to reconcile book income with taxable income reported on the tax return. Schedule M-2 is used to reconcile the beginning and ending Retained Earnings Note: You are NOT required to prepare the optional Schedule M-3. Before beginning the case, please carefully review the following items: Example C: 51 (pages 133 to 135). Schedules M-1 and M-2 for this example are shown on pages 134 and 135, respectively. Ignore the discussion regarding Schedule M-3. Comprehensive Problem C: 3-64 (the solution is provided for you in the Chapter 3 Content folder). Appendix, pages 997 - 1004: Completed Form 1120 for a C Corporation. See page 991 (Facts for Sole Proprietorship) and page 995 (Facts for C Corporation) for the information used to complete this return. Each student must individually complete and submit for grading all required pages of the tax return. 'Group-submitted' returns are not permitted, and will result in a -0- for all parties involved. 1 TaxACT Software: o You must use the TaxACT Software to complete this assignment - no manually prepared returns are permitted. o The software is downloadable from the Pearson MyAccountingLab site. Please note that there is an $11 charge for the software purchase. o The tax software consists of four income tax return types: Form 1040, Form 1065, Form 1120 and Form 1120S. You only need to load the Form 1120 at this time, but I recommend also installing the 1065 and 1120S since we will be using these for the other two cases. o After you have installed the software, access the program on your computer and, click File, New Return. The New TaxACT Return screen will appear. Use the dropdown box and select 1120 return. o The starting point for preparing the tax return will be to complete the Basic Info tab at the top of the screen. The Basic Information screens will ask for general information, such as the Company Name, Address, Federal EIN, etc. The data you enter here will be used in other areas of the tax return. Select information is provided below: o o o o o o o Company name: Per problem information City/State: Cincinnati, OH Zip Code: 45202 Employer Identification Number (EIN): 99-2016014 Phone Number: Not required Start Date: Per problem information Total Assets: $8,048,882 (This is the end-of-year total that appears in item D at the top of page 1 of Form 1120) o Schedules PH and M-3: Do NOT check the boxes for either of these items. o IRS Service Center: Cincinnati, OH o After you have entered the IRS Service Center, you will arrive at the \"Basic Info - Other Information\" screen. This area requires you to enter certain information necessary to complete Schedule K. Answer ALL questions. If an item does not apply, enter No. Select information is provided below: o Principal Business Activity: o Business Activity/Type: Select Retail Trade - Sporting Goods, Hobby, Book and Music Stores o Business Activity Code: 451140 o Business Activity: Retail Sales o Principal Product: Musical Instruments o Affiliated or Controlled Group: Enter 'No.' o Certain Entities Owning Corporation's Voting Stock: Enter 'No.' o Certain Individuals and Estates Owning Corporation's Voting Stock: Enter 'Yes'. o After you have answered 'Yes' to the question immediately above (\"Certain Individuals and Estates Owning Corporation's Voting Stock\"), you will arrive at the Schedule G screen. This section is asking for the stock ownership percentage of each owner who held 20% or more of the company's stock: 2 o Click \"Add\" to enter the required information for each of the corporation's three (3) shareholders: o Leave the EIN box blank. o Enter shareholder's SSN: Mary Travis: 123-45-6789 John Willis: 234-56-7890 Chris Parker: 345-67-8901 o Reason for missing number: Select \"Not Applicable.\" o When you arrive at the \"Percentage Owned in Voting Stock\" input screen, enter the percentage as a decimal (e.g. 50% = .50) o After completing Schedule G you are taken back to Schedule K to complete the remaining questions for that schedule: o o o o o o o o o o o Ownership of a Foreign or Domestic Corporation: Enter 'No.' Ownership of a Foreign or Domestic Partnership or Trust: Enter 'No.' Excess Dividends: Enter 'No.' Foreign Ownership: Enter 'No.' Publicly Offered Debt Instruments: Leave blank. Tax-exempt Interest: You decide. Number of Shareholders: Per problem information Form 1099: Enter 'No'. Ownership Change: Enter 'No'. Asset Disposal: Answer 'No.' Section 351: 'No.' o Federal Estimated Tax Payments: Select 'Yes' and enter the four (4) estimated tax payments per the information provided in your textbook. o State Estimated Tax Payments: Enter 'No.' The state income tax expense will be entered on a separate screen. Note: o The reason for this is that Ohio does not have a corporate \"income\" tax. Instead, since July 2005, the State of Ohio has levied a tax for the \"privilege\" of doing business in the state. The tax is referred to as the \"Commercial Activity Tax\" (CAT). o Form 1125-E Officer's Information: Enter compensation for each shareholder as provided in your textbook: o SSN: As provided earlier. o Percent of time devoted to business: 100% for each shareholder (this is what the percentages in item (c) listed in the Compensation of Officers section on page 158 of your textbook refer to). o After entering Officers' Compensation, scroll through the next few screens until you arrive at Federal Quick Q & A Topics. There are two methods available in TaxACT for entering the detailed items of income, deductions, and other information that must be reported on the corporate Form 1120. Click on the Help Menu for a detailed discussion of this topic: 3 o Federal Q & A Method: If you choose this method, you can use either the \"Stepby-Step Guidance\" option or you can select the specific topics that you want to work on at any given time. Note that the Basic Info. Topic should already be completed (by following the instructions above). o Forms Method: The second method is to enter the data directly on the forms, schedules and worksheets. Note that there are three types of data entry fields in the Forms Method mode: o Green - user-entered items o Blue - system-calculated items o Red - overridden fields o You can switch back and forth between either of the two methods. I do think there are times when you will find it easier to enter data directly on the forms. Note: To provide the required detail for some line items within the software, click the small icon of a hand holding a pencil. The associated text will read \"Add line item details to this field.\" HOWEVER, if a yellow folder is available, use that instead. o Below is select information to assist you with certain line items on the return: o Schedule D - Capital Gains and Losses: o Choose Option 1 on the Schedule D input screen to enter information for the two stock sales. Just enter date acquired, date sold, sales proceeds, and cost. o Enter the 2013 capital loss carryover that is provided on page 160 of your textbook on line 6 of Schedule D. o Form 1120, Line 15 - Bad Debts: Use the amount charged to the allowance account, as provided in your textbook. o Form 1120, Line 17 - Taxes and Licenses: Open the yellow folder associated with this line and enter the state income tax expense here, along with the payroll tax expense. o Form 1120, Line 19 - Charitable Contributions: Open the yellow folder and enter the corporation's charitable contributions as \"Current Year Cash Contributions.\" o Form 1120, Line 20a (Depreciation - Form 4562): Open the yellow folder to access Form 4562 (or select the form directly from the Forms list). Note: Depreciation is covered in the Individual Income Tax course. However, sufficient information has been provided below to assist you with fixed asset data entry required by the TaxACT software. o Form 4562 - Depreciation (see Fixed Assets and Depreciation - textbook page 160): o You cannot enter the asset detail directly on the Form 4562 screen. o Instead, you need to \"Click on the folder to open the supporting document drop-down box\" that appears at the top of the screen and 4 select the first folder labeled \"Form 4562 - Asset Depreciation and Vehicle Expenses.\" o You will then need to select \"add copy\" for each of the company's five depreciable (fixed) assets: (1) Store Building; (2) Equipment 1, (3) Equipment 2, (4) Trucks, and (5) New Equipment (that was purchased 10/17/14). Only one Form 4562 will be generated. o When entering the tax data for the depreciable assets in the TaxACT software, you will want to use the textbook data provided for \"tax purposes\" - not \"book purposes.\" For example, you are told that the Store Building is 39-year non-residential real property. Equipment is 7-year property. o Note that the cost and accumulated tax depreciation for each depreciable asset is provided on page 160. o The following additional data entry information is provided for you: Property Type Method Convention Store Building Non-res. Real MACRS SL MM (mid-month) Equipment 1(a) Equip., Mach. MACRS 200DB HY (half-year) Equipment 2 Equip., Mach MACRS 200DB HY (half-year) Trucks Heavy Trucks MACRS 200DB HY (half-year) New Equip. (b) Equip., Mach MACRS 200DB MQ (mid-quarter) (a) Equipment 1 was sold during the year. Enter the disposal information within the depreciation data entry screen. The system will transfer the associated gain to Forms 4797 and Schedule D. (b) For the New Equipment, enter $500,000 on the \"Section 179\" line. Note: The software will round some of the current year depreciation amounts. In order for all students' depreciation expense to be the same, please carefully review the system-calculated current year depreciation. If your \"Current Depreciation\" amounts do not agree with the following amounts, override the amounts to match the depreciation amounts below. Ignore the system warning: o Store Building - $38,460 (system amount should be the same) o Equipment 1 - $24,980 (the system amount may be $24,989) o Equipment 2 - $99,920 (the system amount may be $99,954) o Trucks - $38,400 (system amount should be the same) o New Equipment - $39,270 (system amount should be the same. Note that this is in addition to the $500,000 Section 179 deduction). After you have entered all depreciable assets, the total depreciation carried to Form 4562, line 22 should be $741,030. 5 o Form 4562 - Organization Expenditures: o To enter the information for tax amortization of the Organization Expenditures (see bottom of page 159 of your textbook), click the Form 4562 drop-down box labeled \"Form 4562 Amortization.\" o Enter the following: o Date Amortization Begins: Enter 1/2/2011 (your textbook indicates 1/2/2010 in error) o Amortizable Amount - $6,000 (this is the $11,000 total amount less the $5,000 that was expensed in the year the business began). o Code Section - Sec. 248 o Period - 15 (years) o Prior Amortization - $1,200 o After you have entered the organizational expenditure data, the amortization amount will automatically be carried to Part IV of Form 4562 (bottom of page 2 of the form) and to the \"Other Deductions\" line (26) of Form 1120). o Form 1120, Line 26 (Other Deductions): Enter any deduction for which a specific line item is not provided on page 1 of Form 1120. o Schedule L: Use the Book Balance Sheet Information provided on page 158 of your textbook to complete this Schedule: o Beginning of Year Total Assets should be $6,029,714. o End of Year Total Assets should be $8,048,882 (matches page 1, Item D, of the Form 1120. o Line 25 - Unappropriated Retained Earnings: The amounts for both beginning and end of year will automatically be entered by the software based upon your entries in Schedule M-2 (bottom of page 5). o Schedule M-1 - Reconciliation of Income (Loss) per Books With Income per Return. Below are some comments regarding certain line items: o Schedule M-1 can be challenging. Follow the guidelines below, but don't be overly concerned if you don't get line 10 to equal the taxable income reported on line 28, page 1 of the Form 1120. o Carefully study the M-1 topics and illustrations in your textbook that are referenced at the beginning of these instructions (Example C: 51, for one). o Line 2: Enter the federal income tax reported per company books. o Line 4: List any type of income (including gains) that is on the tax return but not on the books. For example, if the tax gain on the sale of Equipment 1 is greater than the book gain, the difference would go here. See page 2 of Form 4797 for the tax gain on sale of equipment. 6 o Line 5: There should not be any entries on lines 5a through 5c, but two items should be entered on the line below 5c (click open the yellow folder to access the associated input screen). Carefully review pages 131 and 132 of your textbook for one of the items that will go here. Hint for the other item: Is the amount of bad debt expense deducted on the tax return the same as the deduction on the books? o Line 8: The difference between tax and book depreciation is reported on line 8a. But there are two other items that you will need to enter on the line below 8b. o If you have correctly entered the amounts for lines 2 through 9 of the Schedule M-1, line 1 will automatically match the net income per company books reported on the Book Income Statement (textbook page 159). And line 10 should equal page 1, line 28 - taxable income. o Form 2220 - Underpayment of Estimated Tax: o Check the box on line 8. o Manually enter (override) $3,043 on line 38. Ignore the system warning. Submit for Grading: Please submit the following forms for grading. Form 1120 (5 pages) From 1125-A Schedule D Schedule G Form 1125-E Form 2220 Form 4562 Form 4797 Other Deductions Schedule Schedule L Detail (Current Assets, Other Investments, Other Assets, Current Liabilities, Other Liabilities) Schedule M-1 Reconciliation Worksheet Statement Electing out of Bonus Depreciation Important: You will lose substantial points if you do not submit all required forms. Refer to the Grading Rubric for a listing of all forms to be submitted. All of the forms above should print by default by following these instructions: Select Print from the menu at the top of your screen, then Print Return. Make sure that the \"Include Line Item Details\" box (Settings at the bottom of screen) is checked. 7 1120 U.S. Corporation Income Tax Return Form Department of the Treasury Internal Revenue Service A Check if: 1a Consolidated return (attach Form 851) . b Lifeonlife consolidated return . . . 2 Personal holding co. (attach Sch. PH) . . For calendar year 2015 or tax year beginning B Employer identification number MELODIC MUSICAL SALES, INC TYPE OR PRINT xx-2016014 C Date incorporated Number, street, and room or suite no. If a P.O. box, see instructions. 5500 FOURTH AVENUE 12/31/2010 D Total assets (see instructions) City or town, state, or province, country, and ZIP or foreign postal code $ CITY, ST 98765 . E Check if: (1) (2) Initial return (3) Final return . . . . . . . . . . . . 1a 2 3 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b . . . . . . . . . . . . 5 6 7 Interest . . Gross rents . Gross royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9 10 Capital gain net income (attach Schedule D (Form 1120)) . . . . Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797) Other income (see instructionsattach statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 12 13 Total income. Add lines 3 through 10 . . . . . . . . Compensation of officers (see instructionsattach Form 1125-E) . . . . . . . . . . . . . . . . Salaries and wages (less employment credits) Repairs and maintenance . . . . . . Bad debts . . . . . . . . . . . Rents . . . . . . . . . . . . . . . . . . . . . . . . . 14 15 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 19 Taxes and licenses . . Interest . . . . . Charitable contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income Deductions (See instructions for limitations on deductions.) Tax, Refundable Credits, and Payments Gross receipts or sales . . . . . 8,048,882 (4) Name change Returns and allowances . . . . . Balance. Subtract line 1b from line 1a Cost of goods sold (attach Form 1125-A) Gross profit. Subtract line 2 from line 1c Dividends (Schedule C, line 19) . . b c 2015 , 20 Name 4 Schedule M-3 attached 1a , 2015, ending Information about Form 1120 and its separate instructions is at www.irs.gov/form1120. 3 Personal service corp. (see instructions) . OMB No. 1545-0123 9,000,000 225,000 . . . . . . . . . . . . Address change . . . . 1c 2 3 4 . . . . . . 5 6 7 . . . . . . . . . 8 9 10 40,000 250,060 . . . . . . . . . . . . . 11 12 13 5,025,860 585,000 360,000 . . . . . . . . . . . . . . . 14 15 16 18,720 36,000 . . . . . . . . . . . . . . . 17 18 19 123,750 189,000 27,000 20 21 22 Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562) . Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 21 22 741,030 23 24 25 Pension, profit-sharing, etc., plans . . . . . . . . Employee benefit programs . . . . . . . . . . Domestic production activities deduction (attach Form 8903) . . . . 23 24 25 26 27 28 Other deductions (attach statement) . . . . . . . . . . . . . . . . . . . . . Total deductions. Add lines 12 through 26 . . . . . . . . . . . . . . . . . . . Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11. 29a b Net operating loss deduction (see instructions) . Special deductions (Schedule C, line 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29a 29b . . Add lines 29a and 29b . . . . . . . . . . . . . Taxable income. Subtract line 29c from line 28 (see instructions) . . . . . . . . . 43,200 26 27 28 159,700 2,283,400 2,742,460 31 32 33 34 35 36 . . . . 7,560 . . . . . . 29c 30 7,560 2,734,900 . . . . . . . . . . . . 31 32 33 34 929,866 819,000 3,043 113,909 Overpayment. If line 32 is larger than the total of lines 31 and 33, enter amount overpaid Enter amount from line 35 you want: Credited to 2016 estimated tax 30 . . Total tax (Schedule J, Part I, line 11) . . . . . . . . . . . . . . . . Total payments and refundable credits (Schedule J, Part II, line 21) . . . . . . . Estimated tax penalty (see instructions). Check if Form 2220 is attached . . . . . Amount owed. If line 32 is smaller than the total of lines 31 and 33, enter amount owed c . . . . . Refunded . . . . . . . . . . 35 36 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Date Signature of officer Paid Preparer Use Only Print/Type preparer's name Preparer's signature Sign Here . . . 8,775,000 4,050,000 4,725,000 10,800 May the IRS discuss this return with the preparer shown below (see instructions)? Yes No Title Date Check if self-employed Firm's name Firm's EIN Firm's address Phone no. For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11450Q PTIN Form 1120 (2015) Page 2 Form 1120 (2015) Schedule C Dividends and Special Deductions (see instructions) (a) Dividends received (b) % 1 Dividends from less-than-20%-owned domestic corporations (other than debt-financed stock) . . . . . . . . . . . . . . . . . . . . . . . . 2 Dividends from 20%-or-more-owned domestic corporations (other than debt-financed stock) . . . . . . . . . . . . . . . . . . . . . . . . 3 Dividends on debt-financed stock of domestic and foreign corporations . . . . . 4 Dividends on certain preferred stock of less-than-20%-owned public utilities . . . 42 5 Dividends on certain preferred stock of 20%-or-more-owned public utilities . . . . 48 6 Dividends from less-than-20%-owned foreign corporations and certain FSCs . . . 70 7 Dividends from 20%-or-more-owned foreign corporations and certain FSCs . . . 80 8 Dividends from wholly owned foreign subsidiaries 100 9 Total. Add lines 1 through 8. See instructions for limitation (c) Special deductions (a) (b) . . . . . . . . . . . . . . . . 7,560 80 see instructions . . 70 10,800 . 7,560 10 Dividends from domestic corporations received by a small business investment company operating under the Small Business Investment Act of 1958 . . . . . 100 11 Dividends from affiliated group members . . . . . . . . . . . . . . 100 12 Dividends from certain FSCs . . . . . . . . . . . . . 100 13 Dividends from foreign corporations not included on lines 3, 6, 7, 8, 11, or 12 . . . 14 Income from controlled foreign corporations under subpart F (attach Form(s) 5471) 15 Foreign dividend gross-up . . . . . . . 16 IC-DISC and former DISC dividends not included on lines 1, 2, or 3 . . . . . . 17 Other dividends . . . . . . 18 Deduction for dividends paid on certain preferred stock of public utilities . . . . 19 Total dividends. Add lines 1 through 17. Enter here and on page 1, line 4 . . . 20 Total special deductions. Add lines 9, 10, 11, 12, and 18. Enter here and on page 1, line 29b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,800 . . . . . . 7,560 Form 1120 (2015) Page 3 Form 1120 (2015) Schedule J Tax Computation and Payment (see instructions) Part I-Tax Computation 1 2 3 Check if the corporation is a member of a controlled group (attach Schedule O (Form 1120)) . Income tax. Check if a qualified personal service corporation (see instructions) . . . . Alternative minimum tax (attach Form 4626) . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5a b Add lines 2 and 3 . . . . . . . . Foreign tax credit (attach Form 1118) . . Credit from Form 8834 (see instructions) . . . . . . . . . . . . . . . 9a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General business credit (attach Form 3800) . . . Credit for prior year minimum tax (attach Form 8827) Bond credits from Form 8912 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 Total credits. Add lines 5a through 5e Subtract line 6 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . 8 9a Personal holding company tax (attach Schedule PH (Form 1120)) . Recapture of investment credit (attach Form 4255) . . . . . . . . . . . . . . . . b Recapture of low-income housing credit (attach Form 8611) . . . . . c Interest due under the look-back methodcompleted long-term contracts (attach Form 8697) . . . . . . . . . . . . . . . . . . . . . . Interest due under the look-back methodincome forecast method 8866) . . . . . . . . . . . . . . . . . . . Alternative tax on qualifying shipping activities (attach Form 8902) . Other (see instructionsattach statement) . . . . . . . . 10 11 . . . . . . . . Total. Add lines 9a through 9f . . . . . . . . . . . . Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line 31 . (attach . . . . . . . . . 5a 5b 929,866 . 3 4 929,866 . . . . 6 7 929,866 . . . 8 9d 9e 9f e f . . . . . 2 9c d c d e . . . 5c 5d 5e . . 9b Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 11 929,866 819,000 Part II-Payments and Refundable Credits 12 13 2014 overpayment credited to 2015 2015 estimated tax payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 13 14 15 16 2015 refund applied for on Form 4466 . Combine lines 12, 13, and 14 . . . Tax deposited with Form 7004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 ( 15 16 17 18 Withholding (see instructions) . . . . Total payments. Add lines 15, 16, and 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 819,000 19 Refundable credits from: Form 2439 . . . . . . . . . . . . . . . . . . 20 Form 4136 . . . . . . . . . . Form 8827, line 8c . . . . . . . Other (attach statementsee instructions). Total credits. Add lines 19a through 19d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19a 19b 19c 19d . . . . . . . . 21 Total payments and credits. Add lines 18 and 20. Enter here and on page 1, line 32 . . . . . . 20 21 819,000 a b c d Schedule K . . . . Other Information (see instructions) 1 Check accounting method: a 2 a b c Other (specify) Product or service Accrual c . See the instructions and enter the: Business activity code no. Business activity Cash b . ) 819,000 3 Is the corporation a subsidiary in an affiliated group or a parent-subsidiary controlled group? If \"Yes,\" enter name and EIN of the parent corporation 4 Yes No At the end of the tax year: a b . . . . . . . . . . Did any foreign or domestic corporation, partnership (including any entity treated as a partnership), trust, or tax-exempt organization own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of the corporation's stock entitled to vote? If "Yes," complete Part I of Schedule G (Form 1120) (attach Schedule G) . . . . . . Did any individual or estate own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of the corporation's stock entitled to vote? If "Yes," complete Part II of Schedule G (Form 1120) (attach Schedule G) . Form 1120 (2015) Page 4 Form 1120 (2015) Schedule K Other Information continued (see instructions) Yes 5 No At the end of the tax year, did the corporation: a Own directly 20% or more, or own, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote of any foreign or domestic corporation not included on Form 851, Affiliations Schedule? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (iv) below. (i) Name of Corporation (ii) Employer Identification Number (if any) (iv) Percentage Owned in Voting Stock (iii) Country of Incorporation b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (iv) below. (i) Name of Entity 6 (ii) Employer Identification Number (if any) (iv) Maximum Percentage Owned in Profit, Loss, or Capital (iii) Country of Organization During this tax year, did the corporation pay dividends (other than stock dividends and distributions in exchange for stock) in excess of the corporation's current and accumulated earnings and profits? (See sections 301 and 316.) . . . . . . . If "Yes," file Form 5452, Corporate Report of Nondividend Distributions. If this is a consolidated return, answer here for the parent corporation and on Form 851 for each subsidiary. 7 At any time during the tax year, did one foreign person own, directly or indirectly, at least 25% of (a) the total voting power of all classes of the corporation's stock entitled to vote or (b) the total value of all classes of the corporation's stock? . . . . For rules of attribution, see section 318. If \"Yes,\" enter: (i) Percentage owned and (ii) Owner's country 8 (c) The corporation may have to file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Enter the number of Forms 5472 attached Check this box if the corporation issued publicly offered debt instruments with original issue discount . . . . . . 9 10 If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. Enter the amount of tax-exempt interest received or accrued during the tax year $ Enter the number of shareholders at the end of the tax year (if 100 or fewer) 11 If the corporation has an NOL for the tax year and is electing to forego the carryback period, check here 12 If the corporation is filing a consolidated return, the statement required by Regulations section 1.1502-21(b)(3) must be attached or the election will not be valid. Enter the available NOL carryover from prior tax years (do not reduce it by any deduction on line 29a.) $ 13 . . . . . Are the corporation's total receipts (page 1, line 1a, plus lines 4 through 10) for the tax year and its total assets at the end of the tax year less than $250,000? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . If \"Yes,\" the corporation is not required to complete Schedules L, M-1, and M-2. Instead, enter the total amount of cash distributions and the book value of property distributions (other than cash) made during the tax year $ 14 15a b Is the corporation required to file Schedule UTP (Form 1120), Uncertain Tax Position Statement (see instructions)? If \"Yes,\" complete and attach Schedule UTP. Did the corporation make any payments in 2015 that would require it to file Form(s) 1099? . . . . . . . If \"Yes,\" did or will the corporation file required Forms 1099? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 During this tax year, did the corporation have an 80% or more change in ownership, including a change due to redemption of its own stock? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 During or subsequent to this tax year, but before the filing of this return, did the corporation dispose of more than 65% (by value) of its assets in a taxable, non-taxable, or tax deferred transaction? . . . . . . . . . . . . . . . . . . 18 Did the corporation receive assets in a section 351 transfer in which any of the transferred assets had a fair market basis or fair market value of more than $1 million? . . . . . . . . . . . . . . . . . . . . . . . . . . . Form 1120 (2015) Page 5 Form 1120 (2015) Schedule L Balance Sheets per Books Beginning of tax year (a) Assets 1 . . Cash Trade notes and accounts receivable . Less allowance for bad debts . . . Inventories . . . . . . . . . U.S. government obligations . . . Tax-exempt securities (see instructions) Other current assets (attach statement) Loans to shareholders . . . . . Mortgage and real estate loans . . . Other investments (attach statement) . Buildings and other depreciable assets Less accumulated depreciation . . . Depletable assets . . . . . . . Less accumulated depletion . . . . Land (net of any amortization) . . . Intangible assets (amortizable only) . Less accumulated amortization . . . Other assets (attach statement) . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 18 19 20 21 22 Accounts payable . . . . . . . . . Mortgages, notes, bonds payable in less than 1 year Other current liabilities (attach statement) . . Loans from shareholders . . . . . . . Mortgages, notes, bonds payable in 1 year or more Other liabilities (attach statement) . . . . Capital stock: a Preferred stock . . . . b Common stock . . . . Additional paid-in capital . . . . . . . Retained earningsAppropriated (attach statement) Retained earningsUnappropriated . . . Adjustments to shareholders' equity (attach statement) Less cost of treasury stock . . . . . . Total liabilities and shareholders' equity . . (b) . 2a b 3 4 5 6 7 8 9 10a b 11a b 12 13a b 14 15 End of tax year (c) (d) 242,794 ( 360,000 18,000 ) 433,399 450,000 22,500 ) 342,000 ( 2,250,000 427,500 3,150,000 32,000 12,920 32,000 7,650 285,000 50,000 ( 2,900,000 335,000 ) 2,565,000 ( 4,100,000 471,667 ) ( ) ( ) 3,628,333 250,000 ( ) 250,000 ( ) 50,000 6,029,714 70,000 8,048,882 Liabilities and Shareholders' Equity 23 24 25 26 27 28 Schedule M-1 320,000 600,000 21,600 2,200,000 188,114 900,000 308,713 900,000 900,000 900,000 1,800,000 ( 3,730,928 ) ( 6,029,714 ) 8,048,882 Reconciliation of Income (Loss) per Books With Income per Return Note: The corporation may be required to file Schedule M-3 (see instructions). 1 Net income (loss) per books . . . . . . 2,020,928 2 Federal income tax per books . . . . . 1,055,735 3 Excess of capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 5 a b c 6 4 Income recorded on books this year not included on this return (itemize): Tax-exempt interest $ 8 Deductions on this return not charged against book income this year (itemize): 524,363 a Depreciation . . $ b Charitable contributions $ . equipment Expenses recorded on books this year not deducted on this return (itemize): 4,500 170,060 Depreciation . . . . $ Charitable contributions . $ Travel and entertainment . $ Add lines 1 through 5 . Schedule M-2 1 2 3 7 . . . . . . . 45,000 3,291,723 9 10 1,800,000 2,020,928 5 amortization-400 capital loss-(20,000) Add lines 7 and 8 . . . . . . Income (page 1, line 28)line 6 less line 9 Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L) Balance at beginning of year Net income (loss) per books . Other increases (itemize): Add lines 1, 2, and 3 . . . . . . . . . . . . . . . . . . 3,820,928 6 7 8 Distributions: a Cash . b Stock . c Property Other decreases (itemize): . . . . . . . . . Add lines 5 and 6 . . . . . . Balance at end of year (line 4 less line 7) 544,763 549,263 2,742,460 90,000 90,000 3,730,928 Form 1120 (2015) Form 1125-A (Rev. December 2012) Department of the Treasury Internal Revenue Service Name Cost of Goods Sold OMB No. 1545-2225 Attach to Form 1120, 1120-C, 1120-F, 1120S, 1065, or 1065-B. Information about Form 1125-A and its instructions is at www.irs.gov/form1125a. MELODIC MUSICAL SALES, INC 1 Inventory at beginning of year 2 Purchases . . . . . . Employer identification number XX-2016014 2,250,000 4,950,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 3 4 5 Cost of labor . . . . . . . . . . . Additional section 263A costs (attach schedule) . Other costs (attach schedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 5 6 7 Total. Add lines 1 through 5 . Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 7,200,000 3,150,000 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on Form 1120, page 1, line 2 or the appropriate line of your tax return (see instructions) . . . . . . . . . . . . . . . Check all methods used for valuing closing inventory: (i) Cost 8 4,050,000 9a . . . . . . . . . . . . . . . . . . . . . . b Lower of cost or market (ii) Other (Specify method used and attach explanation.) (iii) Check if there was a writedown of subnormal goods . . . . . . . . . . c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) . . . . . . d If the LIFO inventory method was used for this tax year, enter amount of closing inventory computed under LIFO . . . . . . . . . . . . . . . . . . . . . . . . . . . 9d If property is produced or acquired for resale, do the rules of section 263A apply to the entity (see instructions)? . . e f . . . . . . . . . . . . Was there any change in determining quantities, cost, or valuations between opening and closing inventory? If \"Yes,\" attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section references are to the Internal Revenue Code unless otherwise noted. General Instructions Purpose of Form Use Form 1125-A to calculate and deduct cost of goods sold for certain entities. Who Must File Filers of Form 1120, 1120-C, 1120-F, 1120S, 1065, or 1065-B, must complete and attach Form 1125-A if the applicable entity reports a deduction for cost of goods sold. Inventories Generally, inventories are required at the beginning and end of each tax year if the production, purchase, or sale of merchandise is an income-producing factor. See Regulations section 1.471-1. If inventories are required, you generally must use an accrual method of accounting for sales and purchases of inventory items. Exception for certain taxpayers. If you are a qualifying taxpayer or a qualifying small business taxpayer (defined below), you can adopt or change your accounting method to account for inventoriable items in the same manner as materials and supplies that are not incidental. Under this accounting method, inventory costs for raw materials purchased for use in producing finished goods and merchandise purchased for resale are deductible in the year the finished goods or merchandise are sold (but not before the year you paid for the raw materials or merchandise, if you are also using the cash method). If you account for inventoriable items in the same manner as materials and supplies that are not incidental, you can currently deduct expenditures for direct labor and all indirect costs that would otherwise be included in inventory costs. See the instructions for lines 2 and 7. For additional guidance on this method of accounting, see Pub. 538, Accounting Periods and Methods. For guidance on adopting or changing to this method of accounting, see Form 3115, Application for Change in Accounting Method, and its instructions. Qualifying taxpayer. A qualifying taxpayer is a taxpayer that, (a) for each prior tax year ending after December 16, 1998, has average annual gross receipts of $1 million or less for the 3 prior tax years and (b) its business is not a tax shelter (as defined in section 448(d)(3)). See Rev. Proc. 2001-10, 2001-2 I.R.B. 272. Qualifying small business taxpayer. A qualifying small business taxpayer is a taxpayer that, (a) for each prior tax year For Paperwork Reduction Act Notice, see instructions. Cat. No. 55988R Yes No Yes No ending on or after December 31, 2000, has average annual gross receipts of $10 million or less for the 3 prior tax years, (b) whose principal business activity is not an ineligible activity, and (c) whose business is not a tax shelter (as defined in section 448 (d)(3)). See Rev. Proc. 2002-28, 2002-18 I.R.B. 815. Uniform capitalization rules. The uniform capitalization rules of section 263A generally require you to capitalize, or include in inventory, certain costs incurred in connection with the following. The production of real property and tangible personal property held in inventory or held for sale in the ordinary course of business. Real property or personal property (tangible and intangible) acquired for resale. The production of real property and tangible personal property by a corporation for use in its trade or business or in an activity engaged in for profit. See the discussion on section 263A uniform capitalization rules in the instructions for your tax return before completing Form 1125-A. Also see Regulations sections 1.263A-1 through 1.263A-3. See Regulations section 1.263A-4 for rules for property produced in a farming business. Form 1125-A (Rev. 12-2012) Form 1125-A (Rev. 12-2012) Specific Instructions Line 1. Inventory at Beginning of Year If you are changing your method of accounting for the current tax year, you must refigure last year's closing inventory using the new method of accounting. Enter the result on line 1. If there is a difference between last year's closing inventory and the refigured amount, attach an explanation and take it into account when figuring any section 481(a) adjustment. Line 2. Purchases If you account for inventoriable items in the same manner as materials and supplies that are not incidental, enter amounts paid for all raw materials and merchandise during the tax year on line 2. The amount you can deduct for the tax year is figured on line 8. Reduce purchases by items withdrawn for personal use. For a partnership, the cost of these items should be shown on Schedule K and Schedule K-1 as distributions to partners. Line 4. Additional Section 263A Costs If you elected a simplified method of accounting, enter on line 4 the balance of section 263A costs paid or incurred during the tax year not includible on lines 2, 3, and 5. If you elected the simplified production method, additional section 263A costs are generally those costs, other than interest, that were not capitalized under your method of accounting immediately prior to the effective date of section 263A, but are now required to be capitalized under section 263A. For details, see Regulations section 1.263A-2(b). If you elected the simplified resale method, additional section 263A costs are generally those costs incurred with respect to the following categories. Off-site storage or warehousing. Purchasing. Handling, such as processing, assembling, repackaging, and transporting. General and administrative costs (mixed service costs). Line 5. Other Costs Enter on line 5 any costs paid or incurred during the tax year not entered on lines 2 through 4. Attach a statement listing details of the costs. Special Rules for Cooperatives Cooperatives are allowed to deduct certain per-unit retain allocations. Include these costs on line 5. Attach a statement listing details of per-unit retain allocations paid in: Qualified per-unit retain certificates, Money or other property (except nonqualified per-unit certificates), and Nonqualified per-unit retain certificates redeemed this year. Page Per-unit retain allocations. A cooperative is allowed to deduct from its taxable income amounts paid during the payment period for the tax year as per-unit retain allocations to the extent paid in money, qualified per-unit retain certificates or other property with respect to marketing occurring during such tax year. A per-unit retain allocation is any allocation from a cooperative to a patron with respect to products marketed for him without reference to the cooperative net earnings. A qualified per-unit retain certificate is any per-unit retain certificate that the distributee has agreed to take into account at its stated dollar amount. Nonqualified per-unit retain certificates redeemed this year. Include the amount paid in money or other property (except amounts already included as per-unit retain certificates) to patrons to redeem nonqualified per-unit retain certificates. No deduction is allowed at the time of issuance for a nonqualified per-unit retain certificate. However, the cooperative may take a deduction in the year the certificate is redeemed, subject to the stated dollar amount of the certificate. See section 1383. Also see the instructions for line 29h of Form 1120-C, U.S. Income Tax Return for Cooperative Associations, for a special rule for figuring the cooperative's tax in the year of redemption of a nonqualified per-unit retain certificate. Line 7. Inventory at End of Year See Regulations sections 1.263A-1 through 1.263A-3 for details on figuring the amount of additional section 263A costs to be included in ending inventory. If you account for inventoriable items in the same manner as materials and supplies that are not incidental, enter on line 7 the portion of your raw materials and merchandise purchased for resale that was included in the total on line 6 but was not sold during the year. Line 8. Cost of Goods Sold Enter the amount from line 8 on your tax return as follows. Filers of Form 1120, 1120-C, 1120S, 1065, and 1065-B, enter cost of goods sold on page 1, line 2. Filers of Form 1120-F, enter cost of goods sold on page 3, Section II, line 2. Lines 9a Through 9f. Inventory Valuation Methods Inventories can be valued at: Cost, Cost or market value (whichever is lower), or Any other method approved by the IRS that conforms to the requirements of the applicable regulations cited below. However, if you are using the cash method of accounting, you are required to use cost. Rolling average method. Generally, a rolling average method that is used to value inventories for financial accounting purposes does not clearly reflect income for federal income tax purposes. 2 However, if a filer uses the average cost method for financial accounting purposes, there are safe harbors under which this method will be deemed to clearly reflect income for federal income tax purposes. For details, see Rev. Proc. 2008-43, 2008-30 I.R.B. 186 as modified by Rev. Proc. 2008-52, 2008-36 I.R.B. 587, as modified by Rev. Proc. 2011-14, 2011-4 I.R.B. 330, or a successor. Filers that use erroneous valuation methods must change to a method permitted for federal income tax purposes. Use Form 3115 to make this change. For more information on inventory valuation methods, see Pub. 538. For more information on changes in the method of accounting for inventory, see Form 3115 and the Instructions for Form 3115. Line 9a. Method of valuing closing inventory. On line 9a, check the method(s) used for valuing inventories. Under lower of cost or market, the term \"market\" (for normal goods) means the current bid price prevailing on the inventory valuation date for the particular merchandise in the volume usually purchased by the filer. For a manufacturer, market applies to the basic elements of costraw materials, labor, and burden. If section 263A applies, the basic elements of cost must reflect the current bid price of all direct costs and all indirect costs properly allocable to goods on hand at the inventory date. Inventory may be valued below cost when the merchandise is unsalable at normal prices or unusable in the normal way because the goods are subnormal due to damage, imperfections, shopwear, change of style, odd or broken lots, or other similar causes, including secondhand goods taken in exchange. The goods may be valued at the bona fide selling price, minus the direct cost of disposition (but not less than scrap value). Bona fide selling price means actual offering of goods during a period ending not later than 30 days after inventory date. Lines 9c and 9d. LIFO method. If this is the first year the Last-in, First-out, (LIFO) inventory method was either adopted or extended to inventory goods not previously valued under the LIFO method provided in section 472, attach Form 970, Application To Use LIFO Inventory Method, or a statement with the information required by Form 970. Check the LIFO box on line 9c. On line 9d, enter the amount of total closing inventories computed under section 472. Estimates are acceptable. If you changed or extended your inventory method to LIFO and had to write up the opening inventory to cost in the year of election, report the effect of the write-up as other income, on your applicable return, proportionately over a 3-year period that begins with the year of the LIFO election. Form 1125-A (Rev. 12-2012) Note. Entities using the LIFO method that make an S corporation election or transfer LIFO inventory to an S corporation in a nonrecognition transaction may be subject to an additional tax attributable to the LIFO recapture amount. See the instructions for Form 1120, Schedule J, line 11. Line 9e. If property is produced or acquired for resale and the rules of section 263A apply to the corporation, cooperative, partnership, or other applicable entity, check the "Yes" box on line 9e. Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the United States. Page You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. 3 The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is: Recordkeeping . . . . 4 hr., 18 min. Learning about the law or the form . . . . 1 hr., 33 min. Preparing and sending the form to the IRS . . . . . . 2 hr., 53 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. See the instructions for the tax return with which this form is filed. Form 1125-E (Rev. December 2013) Department of the Treasury Internal Revenue Service Compensation of Officers Attach to Form 1120, 1120-C, 1120-F, 1120-REIT, 1120-RIC, or 1120S. Information about Form 1125-E and its separate instructions is at www.irs.gov/form1125e. OMB No. 1545-2225 Employer identification number Name MELODIC MUSICAL SALES, INC XX-2016014 Note. Complete Form 1125-E only if total receipts are $500,000 or more. See instructions for definition of total receipts. (c) Percent of time devoted to business (b) Social security number (see instructions) (a) Name of officer 1 MARY TRAVIS Percent of stock owned (d) Common (e) Preferred (f) Amount of compensation 100 % 50 % % 265,000 JOHN WILLIS 100 % 25 % % 160,000 CHRIS PARKER 100 % 25 % % 160,000 % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % 2 Total compensation of officers . . . . . . . . . . 2 3 Compensation of officers claimed on Form 1125-A or elsewhere on return . . . . . . . . 3 4 Subtract line 3 from line 2. Enter the result here and on Form 1120, page 1, line 12 or the appropriate line of your tax return . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . For Paperwork Reduction Act Notice, see separate instructions. . . . . . . Cat. No. 55989C 585,000 585,000 Form 1125-E (Rev. 12-2013) Form 2220 Department of the Treasury Internal Revenue Service OMB No. 1545-0123 Underpayment of Estimated Tax by Corporations Information 2015 Attach to the corporation's tax return. about Form 2220 and its separate instructions is at www.irs.gov/form2220. Name Employer identification number XX-2016014 MELODIC MUSICAL SALES, INC Note: Generally, the corporation is not required to file Form 2220 (see Part II below for exceptions) because the IRS will figure any penalty owed and bill the corporation. However, the corporation may still use Form 2220 to figure the penalty. If so, enter the amount from page 2, line 38 on the estimated tax penalty line of the corporation's income tax return, but do not attach Form 2220. Part I 1 2a b c d 3 Required Annual Payment Total tax (see instructions) . . . . . . . . . . . . . . . . . . Personal holding company tax (Schedule PH (Form 1120), line 26) included on line 1 Look-back interest included on line 1 under section 460(b)(2) for completed long-term contracts or section 167(g) for depreciation under the income forecast method . . Credit for federal tax paid on fuels (see instructions) . Total. Add lines 2a through 2c . . . . . . . Subtract line 2d from line 1. If the result is less than does not owe the penalty . . . . . . . . . . . . $500, . . . . do . . . not . . . . . . . . . complete or . . . . . . 2a . . . . . 1 819,000 2d 159,700 3 659,300 159,700 2b . 2c . . . . . . . . . file this form. The corporation . . . . . . . . . 4 Enter the tax shown on the corporation's 2014 income tax return (see instructions). Caution: If the tax is zero or the tax year was for less than 12 months, skip this line and enter the amount from line 3 on line 5 . . 4 5 Required annual payment. Enter the smaller of line 3 or line 4. If the corporation is required to skip line 4, enter the amount from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Part II The corporation is using the adjusted seasonal installment method. The corporation is using the annualized income installment method. 6 7 8 Reasons for FilingCheck the boxes below that apply. If any boxes are checked, the corporation must file Form 2220 even if it does not owe a penalty (see instructions). The corporation is a \"large corporation\" figuring its first required installment based on the prior year's tax. Part III Figuring the Underpayment (a) 9 Installment due dates. Enter in columns (a) through (d) the 15th day of the 4th (Form 990-PF filers: Use 5th month), 6th, 9th, and 12th months of the corporation's tax year . . . . . . . . . . Required installments. If the box on line 6 and/or line 7 above is checked, enter the amounts from Schedule A, line 38. If the box on line 8 (but not 6 or 7) is checked, see instructions for the amounts to enter. If none of these boxes are checked, enter 25% of line 5 above in each column . . . . . . . . . . . . . . . . . Estimated tax paid or credited for each period (see instructions). For column (a) only, enter the amount from line 11 on line 15 . . . . 11 (d) 10 11 (c) 9 10 (b) 105,000 210,000 252,000 252,000 Complete lines 12 through 18 of one column before going to the next column. 12 Enter amount, if any, from line 18 of the preceding column . . . . 12 13 Add lines 11 and 12 . . . 13 14 15 16 Add amounts on lines 16 and 17 of the preceding column Subtract line 14 from line 13. If zero or less, enter -0- . If the amount on line 15 is zero, subtract line Otherwise, enter -0- . . . . . . . . . 17 Underpayment. If line 15 is less than or equal to line 10, subtract line 15 from line 10. Then go to line 12 of the next column. Otherwise, go to line 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 from . . . . . . . . . line 14. . . . 14 15 105,000 16 17 Overpayment. If line 10 is less than line 15, subtract line 10 from line 15. Then go to line 12 of the next column . . . . . . . . . 18 Go to Part IV on page 2 to figure the penalty. Do not go to Part IV if there are no entries on line 17no penalty is owed. 18 For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11746L Form 2220 (2015) Page 2 Form 2220 (2015) Part IV Figuring the Penalty (a) (b) (c) 19 Enter the date of payment or the 15th day of the 3rd month after the close of the tax year, whichever is earlier (see instructions). (Form 990-PF and Form 990-T filers: Use 5th month instead of 3rd month.) . . . . . . . . . . . . . . . . 19 20 Number of days from due date of installment on line 9 to the date shown on line 19 . . . . . . . . . . . . . . . 20 21 Number of days on line 20 after 4/15/2015 and before 7/1/2015 21 22 Underpayment on line 17 23 Number of days on line 20 after 6/30/2015 and before 10/1/2015 24 Underpayment on line 17 25 Number of days on line 20 after 9/30/2015 and before 1/1/2016 26 Underpayment on line 17 27 Number of days on line 20 after 12/31/2015 and before 4/1/2016 28 Underpayment on line 17 29 Number of days on line 20 after 3/31/2016 and before 7/1/2016 30 Underpayment on line 17 31 Number of days on line 20 after 6/30/2016 and before 10/1/2016 32 Underpayment on line 17 33 Number of days on line 20 after 9/30/2016 and before 1/1/2017 34 Underpayment on line 17 35 Number of days on line 20 after 12/31/2016 and before 2/16/2017 36 Underpayment on line 17 37 Add lines 22, 24, 26, 28, 30, 32, 34, and 36 38 (d) Penalty. Add columns (a) through (d) of line 37. Enter the total here and on Form 1120, line 33; or the comparable line for other income tax returns . . . . . . . . . . . . . . . . . . . . . . . . . Number of days on line 21 3% 365 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 36 $ $ $ $ 37 $ $ $ $ 27 28 29 30 31 Number of days on line 31 *% 366 32 33 Number of days on line 33 *% 366 34 35 Number of days on line 35 *% 365 . $ 26 Number of days on line 29 *% 366 . $ 25 Number of days on line 27 3% 366 . $ 24 Number of days on line 25 3% 365 . $ 23 Number of days on line 23 3% 365 . $ 22 . . 38 $ *Use the penalty interest rate for each calendar quarter, which the IRS will determine during the first month in the preceding quarter. These rates are published quarterly in an IRS News Release and in a revenue ruling in the Internal Revenue Bulletin. To obtain this information on the Internet, access the IRS website at www.irs.gov. You can also call 1-800-829-4933 to get interest rate information. Form 2220 (2015) Page 3 Form 2220 (2015) Schedule A Adjusted Seasonal Installment Method and Annualized Income Installment Method (see instructions) Form 1120S filers: For lines 1, 2, 3, and 21, below, \"taxable income\" refers to excess net passive income or the amount on which tax is imposed under section 1374(a), whichever applies. Part I Adjusted Seasonal Installment Method (Caution: Use this method only if the base period percentage for any 6 consecutive months is at least 70%. See instructions.) (a) 1 a b c Enter taxable income for the following periods: Tax year beginning in 2012 . . . . . . Tax year beginning in 2013 . . . . . . Tax year beginning in 2014 . . . . . . . . . . . . . . . . . . 2 Enter taxable income for each period for the tax year beginning in 2015 (see instructions for the treatment of extraordinary items) . 3 Enter taxable income for the following periods: Tax year beginning in 2012 . . . . . . Tax year beginning in 2013 . . . . . . Tax year beginning in 2014 . . . . . . a b c . . . . . . . . . . . . . . . (c) (d) First 5 months First 8 months First 11 months First 4 months . . . (b) First 3 months First 6 months First 9 months Entire year 1a 1b 1c 2 3a 3b 3c 4 Divide the amount in each column on line 1a by the amount in column (d) on line 3a . . . . . . . . . . . . . 4 5 Divide the amount in each column on line 1b by the amount in column (d) on line 3b . . . . . . . . . . . . . 5 6 Divide the amount in each column on line 1c by the amount in column (d) on line 3c . . . . . . . . . . . . . 7 8 9a b c Add lines 4 through 6 . . . . . Divide line 7 by 3.0 . . . . . . Divide line 2 by line 8 . . . . . Extraordinary items (see instructions) Add lines 9a and 9b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 8 9a 9b 9c 10 Figure the tax on the amount on line 9c using the instructions for Form 1120, Schedule J, line 2 (or comparable line of corporation's return) . . . . . . . . . . . . . 10 11a Divide the amount in columns (a) through (c) on line 3a by the amount in column (d) on line 3a . . . . . . . . . . 11a b Divide the amount in columns (a) through (c) on line 3b by the amount in column (d) on line 3b . . . . . . . . . . 11b c Divide the amount in columns (a) through (c) on line 3c by the amount in column (d) on line 3c . . . . . . . . . . 11c 12 Add lines 11a through 11c . . . . . . . . . . . . 12 13 Divide line 12 by 3.0 . . . . . . . . . . . . 13 14 Multiply the amount in columns (a) through (c) of line 10 by columns (a) through (c) of line 13. In column (d), enter the amount from line 10, column (d) . . . . . . . . . . . . 15 Enter any alternative minimum tax for each payment period (see instructions) . . . . . . . . . . . . . . . . 16 17 18 Enter any other taxes for each payment period (see instructions) Add lines 14 through 16 . . . . . . . . . . . . For each period, enter the same type of credits as allowed on Form 2220, lines 1 and 2c (see instructions) . . . . . . 19 Total tax after credits. Subtract line 18 from line 17. If zero or less, enter -0- . . . . . . . . . . . . . . . . 14 15 16 17 18 19 Form 2220 (2015) Page 4 Form 2220 (2015) Part II Annualized Income Installment Method (a) First 20 Annualization periods (see instructions) . 21 Enter taxable income for each annualization period (see instructions for the treatment of extraordinary items) . . . Annualization amounts (see instructions) . . . Annualized taxable income. Multiply line 21 by line 22 . Extraordinary items (see instructions) . . . . . . Add lines 23a and 23b . . . . . . . . . . . . . . . . . Figure the tax on the amount on line 23c using the instructions for Form 1120, Schedule J, line 2 (or comparable line of corporation's return) . . . . . . . . . . . . . 24 Enter any alternative minimum tax for each payment period (see instructions) . . . . . . . . . . . . . . . . 25 26 Enter any other taxes for each payment period (see instructions) 26 27 Total tax. Add lines 24 through 26 27 28 For each period, enter the same type of credits as allowed on Form 2220, lines 1 and 2c (see instructions) . . . . . . 28 Total tax after credits. Subtract line 28 from line 27. If zero or less, enter -0. . . . . . . . . . . . . . . 29 30 Applicable percentage . . . . . . . . . . . . 30 31 Multiply line 29 by line 30 . . . . . . . . . . . . First 23a 23b 23c 24 First (d) 22 23a b c First (c) 21 22 (b) 31 25 29 Part III . . . . . . . . . . . . . . . . . . . . . Required Installments 20 32 If only Part I or Part II is completed, enter the amount in each column from line 19 or line 31. If both parts are completed, enter the smaller of the amounts in each column from line 19 or line 31 . . Add lines 35 and 36 . Required installments. Enter the smaller of line 34 or line 37 here and on page 1 of Form 2220, line 10 (see instructions) . 100% 2nd installment 3rd installment 4th installment 37 38 75% 36 37 50% 35 Subtract line 38 of the preceding column from line 37 of the preceding column . . . . . . . . . . . . . . 25% 34 Enter 25% of line 5 on page 1 of Form 2220 in each column. Note: \"Large corporations,\" see the instructions for line 10 for the amounts to enter . . . . . . . . . . . . months 33 Adjusted seasonal or annualized income installments. Subtract line 33 from line 32. If zero or less, enter -0- . . . months 32 Add the amounts in all preceding columns of line 38 (see instructions) . . . . . . . . . . . . . . . . months 1st installment Note: Complete lines 32 through 38 of one column before completing the next column. months 33 34 35 36 . . . . . . . . . . . . . 38 Form 2220 (2015) ACC 180 Corporate Case 1 Instructions - SPR 16 Problem: C: 3-66 (Melodic Musical Sales, Inc.) Pages 157 - 160 Point Value: 50 Due Date: Monday - March 7, 2016 (11:59 pm) Preparing Form 1120 - Some General Comments: Page one of Form 1120 is used to report the corporate taxpayer's income and expenses. In a sense, it may be thought of as an \"Income Statement,\" but one that is based on tax laws, not GAAP. Table C: 5 (page 159) shows the company's 'book' or 'financial' income, and is the starting point for completing Page 1 of Form 1120. Many of the income and expenses reported on the company's books will be reported on the tax return at the same amounts. However, tax laws do not always agree with GAAP so differences will exist. A good example of such a difference is depreciation. GAAP generally does not recognize MACRS as an acceptable method of depreciation. Schedule L is the Balance Sheet. You will use the information provided in Table C: 4 to complete Schedule L. However, Table C: 4 is actually a Trial Balance - not a Balance Sheet. The Total Assets and Total Liabilities and Shareholders' Equity on Schedule L will NOT equal the totals in the table. Beginning and ending Total