I need help with this Tax Case.

Tax Case:

You are a recently hired new staff accountant at a medium-sized local accounting firm. Your manager, Mike, asks you to come into his office to discuss the firm's newest client, Nancy's Nutritionals. He does not know much about the company, except that it is in the business of selling vitamins and other nutritional supplements at several retail locations in the metro-Atlanta area. Mike is normally involved with the firm's audits; he usually does not work with compilation and tax compliance clients. He tells you to prepare for the client, a full set of financial statements and a Form 1120 including all supporting schedules and forms. He hands you the client folder and sends you on your way.

When back at your desk, you open the folder and find a beginning and ending trial balance (attached) for 2019. Besides the trial balances, the folder also contains various notations that you organized as follows:

The legal name of the business is Clayton Corporation d.b.a. Nancy's Nutritionals

The business activity code (NAICS) for the corporation is 446191

The business's EIN number is 58-1234567

The corporate address is 5104 N Henry Blvd, Stockbridge, GA 30281

The business is organized as a calendar year C-corporation

The business was incorporated in Georgia on March 8, 2016

Nancy Cole is the corporation's only shareholder and officer

She devotes 100% of her time to the business

Her Social Security number is 123-00-4567

The corporation isnota member of an affiliated or control group

All stock is common stock with no stated value

The corporation uses the hybrid method of accounting

The corporation made no payments requiring the issuance of a Form 1099

The corporation made timely estimated federal income tax payments of $360,000, based on last year's tax liability adjusted for the change in tax rates

The corporation owns less than 10% of the companies in its stock portfolio

The corporation made a cash distribution of $65,000 to Nancy Cole

Tax depreciation exceeds book depreciation by $80,000. The corporation uses the straight-line method for financial accounting purposes and MACRS for income tax purposes.

The corporation uses a just-in-time inventory system so they have no write-downs of obsolete inventory. The inventory is valued at cost.

The corporation uses the direct write-off method for bad debts.

Based on your experience with other client folders, this one contains very little information. Perplexed, you ask your supervisor, Sarah, for her opinion. She agrees with your assessment and suggests you ask Mike if prior year's financials and tax returns are available. Mike said no the client misplaced the prior years financials and tax returns. He further explained, prior to becoming a client of the firm; Nancy used a non-CPA bookkeeping and tax return preparation firm. She is currently having a dispute with them over the quality and the cost of the services provided. Consequently, the firm will not release the financial statements or tax returns until the dispute is settled. She has contacted the Internal Revenue Service to get copies of previously filed federal income tax returns. Mike asked Sarah to review your work before he sees it. Sarah has asked you to do the following:

Required:

Close the temporary income statement accounts making any required adjusting entries

Calculate the taxable income of the corporation.

Calculate the current tax expense and any deferred tax asset or liability.

Provide a balance sheet for the corporation.

Provide a statement of retained earnings.

Provide a statement of cash flows using the indirect method.

Calculate a Form 1120 for the 2019 tax year including all required schedules and forms.

Due to the small size of the corporation, a schedule M-3 isnotrequired.

This is your first big assignment and you want to impress both Sarah and Mike. Consequently, you will prepare the financial statements in good form, do the calculations in Excel, and complete the tax return using the fill-in forms available from the IRS website.