Ice inc. is organized in the state of Kentucky as a corporation and is taxed as a C corporation with a calendar year-end. Ice inc. provides testing services to businesses located in the midwest. Its business office is located in Kentucky City, Kentucky. Ice inc. address, employer identification number (EIN), and date of incorporation are:

Covid-19 Ice inc. , Inc.

18 beal st .

Homewood kentucky

EIN- 88988/1

Date Incorporated: November 1, 2019

Ice inc. has only one class of common stock issued (no preferred stock). There are currently 25,000 shares of Ice inc. common stock issued and outstanding. Ice inc. is owned equally by five shareholders, with no family relationship among any of them.

Ice inc. uses the accrual method of accounting and follows GAAP for book purposes. Ice inc. is not a subsidiary and is not in an affiliated group with any other entity.

Ice inc. reported the following information for the year:

• Ice inc. did not have an operating loss carryover, net capital loss carryover, or charitable contribution carryover from the prior year.

Additional information:

Ice inc. income statement for 2020 is provided on the next page. The following items should be considered in connection with reconciling book income to tax income.

Ice inc. received total dividends of $80,000 related to investments in other corporations. Ice inc. did not own more than 10% of the stock for any of its investment.

Ice inc. contributed $375,000 cash to charitable 501(c)(3) organizations during the year that are all considered public charities.

Ice inc. total tax depreciation reported on Form 4562 for the year is $474,110. (Note: You are not required to complete Form 4562).

All employees wages and bonuses were paid on or before December 31, 2020. You may assume that all wages and bonuses were reasonable.

Ice inc. allowance for doubtful accounts increased by a net of $11,000 after taking into account writing off $54,000 in receivables in 2020.

On December 1, 2020 Ice inc. paid Sal, Inc. $50,000 for services to be provided in 2021. Ice inc. expects that the services will be provided to Ice inc. by January 31, 2021. Ice inc. did not claim this payment as a book deduction on its 2020 income statement.

Ice inc. paid a total dividend of $100,000 in 2020, which was allocated among the shareholders based on their percentage of stock ownership.

You may assume that all business expenses were ordinary and necessary and reasonable in amount. You may assume that all of the interest expense is deductible.

Ice inc. timely made four equal federal estimated tax payments of $65,000 each during 2020. It did not have a refund of income tax from 2019 that was applied to its 2020 income taxes. Ice inc. would like to apply any overpayment of income taxes for 2020 to its 2021 estimated tax payments.

Use 21% as the applicable tax rate for taxable income. Ice inc. owes no other taxes referenced on Schedule J and is not entitled to any credits listed on Part III of Schedule J.

Income Statement for the period ending December 31, 2020

Item Amount

Income:

Service Revenue $5,100,000

Death benefit proceeds from life ins. Policy 1,250,000

Dividend income 80,000

Loss on sale of investments (22,250)

Interest Income - Bank 5,000

Interest Income Kentucky City, MO exempt bond 150

Total Income: $6,412,900

Expenses:

Employee Salaries, Bonuses, and Paid Vacation 1,420,250

Repairs and Maintenance 19,000

Bad Debts 75,000

Rent 130,000

Property Taxes 12,500

Kentucky taxes paid 45,000

Missouri taxes paid 45,000

Iowa taxes paid 30,000

Payroll Taxes 120,000

Licensing Fees 3,200

Interest Expense 101,000

Depreciation 312,500

Office Supplies 5,400

Employee Training 3,600

Employee Benefits 24,000

Cash Charitable Contributions 375,000

Advertising 90,000

Meals 22,500

Entertainment 15,000

Travel 5,700

Insurance 19,750

Utilities 214,000

Government Fines 15,000

Political contributions 100,000

Federal income tax expense 525,000

Total Expenses: $3,203,400

Net Income (Loss): $2,684,500

WHAT IS THE RECONCILIATION OF INCOME (LOSS PER BOKS WITH ICNOME PER RETURN. THIS IS SCHEDULE M- 1 OF THE 1120 PLEASE FILL OUT AND SHOW WORK