I need help on this homework. Prepare Schedule M1.

Walsh College Tax 507 - Tax Accounting Schedule M-1 Project Ten (10) Points Jalm, Inc. is a calendar year accrual basis taxpayer. It has the following financial information for the 2015 taxable year: Balance Sheet Cash Accounts Receivable Less: Allowance for Doubtful Accounts Inventory Less: Reserve for Obsolesence Prepaid Insurance Beginning $ 100,000 $ 220,000 (40,000) 90,000 (10,000) 4,000 Current Assets $ Land Building Machinery and Equipment Furniture and Fixtures Total Less: Accumulated Depreciation $ Net Fixed Assets $ 620,000 $ 626,000 Note Receivable $ 300,000 $ 200,000 Total Assets $ 1,284,000 $ 1,263,350 Accounts Payable Accrued Expenses Accrued Bonus $ 45,000 30,000 100,000 $ 48,000 35,000 70,000 Current Liabilities $ 175,000 $ 153,000 Long-Term Debt $ 500,000 $ 500,000 Total Liabilities $ 675,000 $ 653,000 $ 1,000 4,000 604,000 $ 1,000 4,000 605,350 Total Equity $ 609,000 $ 610,350 Total Liabilities and Equity $ 1,284,000 $ 1,263,350 $ 364,000 $ 70,000 $ 630,000 140,000 40,000 880,000 $ (260,000) Ending 142,350 260,000 (50,000) 95,000 (12,000) 2,000 437,350 70,000 630,000 165,000 55,000 920,000 (294,000) Equity: Common Stock Additional Paid in Capital Retained Earnings Income Statement Gross Sales $ Cost of Goods Sold Gross Margin Selling, General, and Administrative Expenses: Bad Debt Depreciation Wages and Salaries Other Operating Income Other Income (Expenses): Interest Income Gain on Sale of Land Interest Expense Total Other Income (Expense) Net Income Before Tax 1,200,000 (650,000) $ 550,000 $ $ 15,000 4,000 220,000 280,000 519,000 $ 31,000 $ 500 (30,000) $ (29,500) $ 1,500 Federal Income Tax (150) Net Income $ 1,350 Net Income Add: Depreciation Subtotal $ 1,350 34,000 35,350 Cash Flow $ Change in Working Capital: Accounts Receivable, Net Inventory, Net Prepaid Insurance Accounts Payable Accrued Expenses Accrued Bonus (30,000) (3,000) 2,000 3,000 5,000 (30,000) Cash From Operations $ (17,650) Purchase of Fixed Assets Collection on Note Receivable $ (40,000) 100,000 Cash From Investing Activities $ 60,000 Change in Cash Cash, Beginning $ 42,350 100,000 Cash, Ending $ 142,350 Notes: 1. 2. 3. 4. 5. 6. Jalm wrote off $5,000 of acccounts receivable against the reserve in 2015 Prepaid insurance at the beginning of the year represented the unrecovered portion of a three year premium for $6,000 covering the period January 2014 through December 2016. Jalm sold $100,000 of excess land to an unrelated third party for $400,000 in 2014. The sale called for $100,000 cash paid at closing and a note for $300,000 payable in three (3) equal installments of $100,000 each on the anniversary date of the sale. The note provided for adequate stated interest. The bonus payable represents a bonus accrued each year to the 80 percent shareholder. All bonuses are paid on March 31 of the following year. Jalm intends on taking a 179 deduction for the current year fixed asset acquistions MACRS depreciation on beginning of year assets is $42,000. Complete a Schedule M-1 (not M-3) for 2015 based on the above information