I'm trying to complete the Form 1120S. I am having an issue how to compute the following information in the form, please, help me to finish all the missing items in the form 1120S.

• The corporation received insurance proceeds of $150,000 for life insurance on a key executive. Relative insurance premiums paid for the year were $5,000.
• Beginning Balances: Accumulated Adjustments Account $100,000

Other Adjustments Account $ 25,000

• Net Income per Books was $445,000 including Life insurance proceeds of $150,000 and Life Insurance Premiums of $5,000.

ACNT 1347 Form 1120-S Practice Tax Return Facts in 2015: ABC Inc., a S Corporation, 123 Oak Dr Houston TX 77002 EIN-74-111111 Date S election effective- 1/1/2000 Date Incorporated 1/1/2000 Business Activity, retail sales (product-clothing) Business Code 99999 The corporation is a cash basis business Total Assets $5,000,000 Gross Receipts $1,000,000 Cost of Goods Sold $400,000 (assume no beginning and ending inventory and purchases are $400,000) ABC Inc. uses the lower of cost or market method for valuing inventory and also uses the FIFO method for determining the cost of goods sold Compensation to Bee Jones, 40% shareholder/President was $200,000 There are three shareholders in the S Corporation Salaries and wages paid to non-shareholder employees were $50,000 Office Rent paid for corporate office was $10,000 Supplies expense totaled $40,000 THE CORPORATION RECEIVED INSURANCE PROCEEDS OF $150,000 FOR LIFE INSURANCE ON A KEY EXECUTIVE . RELATIVE INSURANCE PREMIUMS PAID FOR THE YEAR WERE $5,000. BEGINNING BALANCES : ACCUMULATED ADJUSTMENTS ACCOUNT $100,000 OTHER ADJUSTMENTS ACCOUNT $ 25,000 NET INCOME PER BOOKS WAS $445,000 INCLUDING LIFE INSURANCE PROCEEDS OF $150,000 AND L IFE INSURANCE P REMIUMS OF $5,000. There were no distributions made to the shareholders. The corporation has no debts. The corporation has engaged you to prepare the 2015 Form 1120-S (pages 1-5 excluding Schedule L on page 4) for the ABC, Inc. Also, prepare the Schedule K-1 for Bee Jones, 40% shareholder (SSN: 123-45-6789). Be sure to sign the return as the preparer. Do not put your SSN # on the Form 1120-S. Email me ALL completed tax forms via Canvas email by the due date. 671113 Schedule K-1 (Form 1120S) 2015 Department of the Treasury Internal Revenue Service For calendar year 2015, or tax year beginning ending Jan1 , 2015 Dec 31 , 20 15 Shareholder's Share of Income, Deductions, See back of form and separate instructions. Credits, etc. Part I Information About the Corporation Corporation's employer identification number B Corporation's name, address, city, state, and ZIP code 74-111111 Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items 1 Ordinary business income (loss) 2 Net rental real estate income (loss) 3 Other net rental income (loss) 4 Interest income 13 Credits 14 Foreign transactions 120,000 5b Qualified dividends ABC INC 123 Oak Drive, Houston Tx 77022 6 Royalties 7 Net short-term capital gain (loss) 8a Net long-term capital gain (loss) IRS Center where corporation filed return Part II OMB No. 1545-0123 Amended K-1 5a Ordinary dividends A C Final K-1 8b Collectibles (28%) gain (loss) Information About the Shareholder 8c Unrecaptured section 1250 gain D Shareholder's identifying number E Shareholder's name, address, city, state, and ZIP code 123-45-6789 9 Net section 1231 gain (loss) 10 Other income (loss) 15 Alternative minimum tax (AMT) items 11 Section 179 deduction 16 Items affecting shareholder basis 12 Other deductions 17 Other information Bee Jones Shareholder's percentage of stock ownership for tax year . . . . . . . 40 % For IRS Use Only F * See attached statement for additional information. For Paperwork Reduction Act Notice, see Instructions for Form 1120S. IRS.gov/form1120s Cat. No. 11520D Schedule K-1 (Form 1120S) 2015 Schedule K-1 (Form 1120S) 2015 Page 2 This list identifies the codes used on Schedule K-1 for all shareholders and provides summarized reporting information for shareholders who file Form 1040. For detailed reporting and filing information, see the separate Shareholder's Instructions for Schedule K-1 and the instructions for your income tax return. Code Ordinary business income (loss). Determine whether the income (loss) is passive or nonpassive and enter on your return as follows: Report on Passive loss See the Shareholder's Instructions Passive income Schedule E, line 28, column (g) Nonpassive loss Schedule E, line 28, column (h) Nonpassive income Schedule E, line 28, column (j) 2. Net rental real estate income (loss) See the Shareholder's Instructions 3. Other net rental income (loss) Net income Schedule E, line 28, column (g) Net loss See the Shareholder's Instructions 4. Interest income Form 1040, line 8a 5a. Ordinary dividends Form 1040, line 9a 5b. Qualified dividends Form 1040, line 9b 6. Royalties Schedule E, line 4 7. Net short-term capital gain (loss) Schedule D, line 5 8a. Net long-term capital gain (loss) Schedule D, line 12 8b. Collectibles (28%) gain (loss) 28% Rate Gain Worksheet, line 4 (Schedule D instructions) 1. 8c. Unrecaptured section 1250 gain 9. Net section 1231 gain (loss) 10. Other income (loss) Code A Other portfolio income (loss) B C D E See the Shareholder's Instructions See the Shareholder's Instructions See the Shareholder's Instructions Involuntary conversions Sec. 1256 contracts & straddles Mining exploration costs recapture Other income (loss) See the Shareholder's Instructions Form 6781, line 1 See Pub. 535 See the Shareholder's Instructions 11. Section 179 deduction See the Shareholder's Instructions 12. Other deductions A Cash contributions (50%) B Cash contributions (30%) C Noncash contributions (50%) See the Shareholder's D Noncash contributions (30%) Instructions E Capital gain property to a 50% organization (30%) F Capital gain property (20%) G Contributions (100%) H Investment interest expense Form 4952, line 1 Schedule E, line 19 I Deductionsroyalty income J Section 59(e)(2) expenditures See the Shareholder's Instructions K Deductionsportfolio (2% floor) Schedule A, line 23 L Deductionsportfolio (other) Schedule A, line 28 M Preproductive period expenses See the Shareholder's Instructions N Commercial revitalization deduction from rental real estate activities See Form 8582 instructions O Reforestation expense deduction See the Shareholder's Instructions P Domestic production activities information See Form 8903 instructions Q Qualified production activities income Form 8903, line 7b R Employer's Form W-2 wages Form 8903, line 17 S Other deductions See the Shareholder's Instructions 13. Credits A Low-income housing credit (section 42(j)(5)) from pre-2008 buildings B Low-income housing credit (other) from } pre-2008 buildings C D E F G H I J K L M Low-income housing credit (section 42(j)(5)) from post-2007 buildings Low-income housing credit (other) from post-2007 buildings Qualified rehabilitation expenditures (rental real estate) Other rental real estate credits Other rental credits Undistributed capital gains credit Biofuel producer credit Work opportunity credit Disabled access credit Empowerment zone employment credit Credit for increasing research activities } See the Shareholder's Instructions O P See the Shareholder's Instructions Credit for employer social security and Medicare taxes Backup withholding Other credits } Report on See the Shareholder's Instructions 14. Foreign transactions A Name of country or U.S. possession Form 1116, Part I B Gross income from all sources C Gross income sourced at shareholder level Foreign gross income sourced at corporate level D Passive category E General category Form 1116, Part I F Other Deductions allocated and apportioned at shareholder level G Interest expense Form 1116, Part I H Other Form 1116, Part I Deductions allocated and apportioned at corporate level to foreign source income I Passive category Form 1116, Part I J General category K Other Other information L Total foreign taxes paid Form 1116, Part II M Total foreign taxes accrued Form 1116, Part II N Reduction in taxes available for credit Form 1116, line 12 Form 8873 O Foreign trading gross receipts Form 8873 P Extraterritorial income exclusion See the Shareholder's Instructions Q Other foreign transactions 15. Alternative minimum tax (AMT) items A Post-1986 depreciation adjustment See the B Adjusted gain or loss Shareholder's C Depletion (other than oil & gas) Instructions and D Oil, gas, & geothermalgross income the Instructions for E Oil, gas, & geothermaldeductions Form 6251 F Other AMT items 16. Items affecting shareholder basis A Tax-exempt interest income Form 1040, line 8b B Other tax-exempt income C Nondeductible expenses See the Shareholder's D Distributions Instructions E Repayment of loans from shareholders } } } } } 17. Other information A Investment income B Investment expenses C Qualified rehabilitation expenditures (other than rental real estate) D Basis of energy property E Recapture of low-income housing credit (section 42(j)(5)) F Recapture of low-income housing credit (other) G Recapture of investment credit H Recapture of other credits Look-back interestcompleted I J K L Form 1040, line 73, box a } N M N O P Q R S T U V } long-term contracts Look-back interestincome forecast method Dispositions of property with section 179 deductions Recapture of section 179 deduction Section 453(l)(3) information Section 453A(c) information Section 1260(b) information Interest allocable to production expenditures CCF nonqualified withdrawals Depletion informationoil and gas Reserved Section 108(i) information Net investment income Other information Form 4952, line 4a Form 4952, line 5 See the Shareholder's Instructions See the Shareholder's Instructions Form 8611, line 8 Form 8611, line 8 See Form 4255 See the Shareholder's Instructions See Form 8697 See Form 8866 See the Shareholder's Instructions Form 1120S Department of the Treasury Internal Revenue Service U.S. Income Tax Return for an S Corporation OMB No. 1545-0123 Do not file this form unless the corporation has filed or is attaching Form 2553 to elect to be an S corporation. Information about Form 1120S and its separate instructions is at www.irs.gov/form1120s. 2015 For calendar year 2015 or tax year beginning A S election effective date January 1, 2000 B Business activity code number (see instructions) TYPE OR PRINT 99999 January 1 , 2015, ending 15 D Employer identification number 74-111111 ABC INC E Date incorporated Number, street, and room or suite no. If a P.O. box, see instructions. 123 Oak Drive City or town, state or province, country, and ZIP or foreign postal code Houston TX, 77002 C Check if Sch. M-3 attached , 20 December 31 Name 1/1/2000 F Total assets (see instructions) 5,000,000 $ Yes No If \"Yes,\" attach Form 2553 if not already filed G Is the corporation electing to be an S corporation beginning with this tax year? (4) (3) (5) Name change Address change S election termination or revocation Final return (2) Amended return H Check if: (1) I Enter the number of shareholders who were shareholders during any part of the tax year . . . . . . . . . 3 Caution: Include only trade or business income and expenses on lines 1a through 21. See the instructions for more information. 1a . . . . . . . . . . . . . . 1a 1,000,000 . . . . . . . . . . . . . . 1b Balance. Subtract line 1b from line 1a . . . . . . . . . . . . . . . . . . . Cost of goods sold (attach Form 1125-A) . . . . . . . . . . . . . . . . . . Gross profit. Subtract line 2 from line 1c . . . . . . . . . . . . . . . . . . Net gain (loss) from Form 4797, line 17 (attach Form 4797) . . . . . . . . . . . . Other income (loss) (see instructionsattach statement) . . . . . . . . . . . . . Total income (loss). Add lines 3 through 5 . . . . . . . . . . . . . . . . Compensation of officers (see instructionsattach Form 1125-E) . . . . . . . . . . Salaries and wages (less employment credits) . . . . . . . . . . . . . . . . Repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . . Bad debts . . . . . . . . . . . . . . . . . . . . . . . . . . . Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxes and licenses . . . . . . . . . . . . . . . . . . . . . . . . . Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562) . . . . Depletion (Do not deduct oil and gas depletion.) . . . . . . . . . . . . . . . Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension, profit-sharing, etc., plans . . . . . . . . . . . . . . . . . . . . Employee benefit programs . . . . . . . . . . . . . . . . . . . . . . Other deductions (attach statement) . . . . . . . . . . . . . . . . . . . Total deductions. Add lines 7 through 19 . . . . . . . . . . . . . . . . Ordinary business income (loss). Subtract line 20 from line 6 . . . . . . . . . . . Excess net passive income or LIFO recapture tax (see instructions) . . 22a Tax from Schedule D (Form 1120S) . . . . . . . . . . . 22b Add lines 22a and 22b (see instructions for additional taxes) . . . . . . . . . . . . 2015 estimated tax payments and 2014 overpayment credited to 2015 23a Tax deposited with Form 7004 . . . . . . . . . . . . 23b Credit for federal tax paid on fuels (attach Form 4136) . . . . . 23c Add lines 23a through 23c . . . . . . . . . . . . . . . . . . . . . . Estimated tax penalty (see instructions). Check if Form 2220 is attached . . . . . . Amount owed. If line 23d is smaller than the total of lines 22c and 24, enter amount owed . . Overpayment. If line 23d is larger than the total of lines 22c and 24, enter amount overpaid . . Enter amount from line 26 Credited to 2016 estimated tax Refunded Gross receipts or sales . Tax and Payments Deductions (see instructions for limitations) Income b Returns and allowances c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 a b c 23 a b c d 24 25 26 27 1,000,000 400,000 600,000 600,000 200,000 50,000 10,000 40,000 300,000 300,000 22c 23d 24 25 26 27 Paid Preparer Use Only Date Signature of officer Print/Type preparer's name Preparer's signature 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. May the IRS discuss this return with the preparer shown below (see instructions)? Sign Here 1c 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Yes Title Date Janet Gutierrez 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. 11510H No PTIN Form 1120S (2015) Form 1120S (2015) Schedule B 1 2 3 4 Page 2 Other Information (see instructions) Yes No a Cash b Accrual Other (specify) c See the instructions and enter the: a Business activity 99999 b Product or service Clothing Check accounting method: At any time during the tax year, was any shareholder of the corporation a disregarded entity, a trust, an estate, or a nominee or similar person? If "Yes," attach Schedule B-1, Information on Certain Shareholders of an S Corporation . . 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 stock issued and outstanding of any foreign or domestic corporation? For rules of constructive ownership, see instructions. If \"Yes,\" complete (i) through (v) below . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (i) Name of Corporation (ii) Employer Identification Number (if any) (iii) Country of Incorporation (iv) Percentage of Stock Owned (v) If Percentage in (iv) is 100%, Enter the Date (if any) a Qualified Subchapter S Subsidiary Election Was Made b Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital 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 (v) below . . . . . . . (i) Name of Entity (ii) Employer Identification Number (if any) (iii) Type of Entity (iv) Country of Organization (v) Maximum Percentage Owned in Profit, Loss, or Capital 5 a At the end of the tax year, did the corporation have any outstanding shares of restricted stock? . . . . . . . If \"Yes,\" complete lines (i) and (ii) below. (i) Total shares of restricted stock. . . . . . . . . . (ii) Total shares of non-restricted stock . . . . . . . . b At the end of the tax year, did the corporation have any outstanding stock options, warrants, or similar instruments? . . If \"Yes,\" complete lines (i) and (ii) below. (i) Total shares of stock outstanding at the end of the tax year (ii) Total shares of stock outstanding if all instruments were executed 6 7 Has this corporation filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any reportable transaction? . . . . . . . . . . . . . . . . . . . . . . . . Check this box if the corporation issued publicly offered debt instruments with original issue discount . . . . If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. If the corporation: (a) was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to the basis of the asset (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years (see instructions) . . . . . . . . . . . . . . . $ $ 9 Enter the accumulated earnings and profits of the corporation at the end of the tax year. 10 Does the corporation satisfy both of the following conditions? a The corporation's total receipts (see instructions) for the tax year were less than $250,000 . . . . . . . . . . b The corporation's total assets at the end of the tax year were less than $250,000 . . . . . . . . . . . . If \"Yes,\" the corporation is not required to complete Schedules L and M-1. 8 11 During the tax year, did the corporation have any non-shareholder debt that was canceled, was forgiven, or had terms modified so as to reduce the principal amount of the debt? . . . . . . . . . . . . . . . . If \"Yes,\" enter the amount of principal reduction $ 12 During the tax year, was a qualified subchapter S subsidiary election terminated or revoked? If \"Yes,\" see instructions 13 a Did the corporation make any payments in 2015 that would require it to file Form(s) 1099? . . . . . . . . . b If \"Yes,\" did the corporation file or will it file required Forms 1099? . . . . . . . . . . . . . . . . the . . . . Form 1120S (2015) Form 1120S (2015) Credits Deductions Income (Loss) Schedule K Ordinary business income (loss) (page 1, line 21) . . . . . . . . . . . . . Net rental real estate income (loss) (attach Form 8825) . . . . . . . . . . . Other gross rental income (loss) . . . . . . . . . . 3a Expenses from other rental activities (attach statement) . . 3b Other net rental income (loss). Subtract line 3b from line 3a . . . . . . . . . Interest income . . . . . . . . . . . . . . . . . . . . . . . Dividends: a Ordinary dividends . . . . . . . . . . . . . . . . . . b Qualified dividends . . . . . . . . . . 5b 6 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . 7 Net short-term capital gain (loss) (attach Schedule D (Form 1120S)) . . . . . . . 8 a Net long-term capital gain (loss) (attach Schedule D (Form 1120S)) . . . . . . . b Collectibles (28%) gain (loss) . . . . . . . . . . . 8b c Unrecaptured section 1250 gain (attach statement) . . . . 8c 9 Net section 1231 gain (loss) (attach Form 4797) . . . . . . . . . . . . . 10 Other income (loss) (see instructions) . . Type 11 Section 179 deduction (attach Form 4562) . . . . . . . . . . . . . . . 12a Charitable contributions . . . . . . . . . . . . . . . . . . . . b Investment interest expense . . . . . . . . . . . . . . . . . . . c Section 59(e)(2) expenditures (1) Type (2) Amount d Other deductions (see instructions) . . . Type 13a Low-income housing credit (section 42(j)(5)) . . . . . . . . . . . . . . b Low-income housing credit (other) . . . . . . . . . . . . . . . . . c Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable) . d Other rental real estate credits (see instructions) Type e Other rental credits (see instructions) . . . Type Foreign Transactions Alternative Minimum Tax (AMT) Items Biofuel producer credit (attach Form 6478) Other credits (see instructions) . . . . Name of country or U.S. possession . . 3 Total amount 1 2 3a b c 4 5 f g 14a b c Items Affecting Shareholder Basis Page Shareholders' Pro Rata Share Items . . . . Type . . . . . . . . 1 2 . . . 3c 4 5a . . . 6 7 8a . 9 10 11 12a 12b . . . 300,000 12c(2) . . . 12d 13a 13b 13c 13d 13e 13f 13g . . . . Gross income from all sources . . . . . . . . . . . . . . . . Gross income sourced at shareholder level . . . . . . . . . . . . Foreign gross income sourced at corporate level d Passive category . . . . . . . . . . . . . . . . . . . . e General category . . . . . . . . . . . . . . . . . . . . f Other (attach statement) . . . . . . . . . . . . . . . . . . Deductions allocated and apportioned at shareholder level g Interest expense . . . . . . . . . . . . . . . . . . . . . h Other . . . . . . . . . . . . . . . . . . . . . . . . Deductions allocated and apportioned at corporate level to foreign source income i Passive category . . . . . . . . . . . . . . . . . . . . j General category . . . . . . . . . . . . . . . . . . . . k Other (attach statement) . . . . . . . . . . . . . . . . . . Other information l Total foreign taxes (check one): Paid Accrued . . . . . . . m Reduction in taxes available for credit (attach statement) . . . . . . . . n Other foreign tax information (attach statement) 15a Post-1986 depreciation adjustment . . . . . . . . . . . . . . . b Adjusted gain or loss . . . . . . . . . . . . . . . . . . . c Depletion (other than oil and gas) . . . . . . . . . . . . . . . d Oil, gas, and geothermal propertiesgross income . . . . . . . . . . e Oil, gas, and geothermal propertiesdeductions . . . . . . . . . . . f Other AMT items (attach statement) . . . . . . . . . . . . . . . 16a Tax-exempt interest income . . . . . . . . . . . . . . . . . b Other tax-exempt income . . . . . . . . . . . . . . . . . . c Nondeductible expenses . . . . . . . . . . . . . . . . . . d Distributions (attach statement if required) (see instructions) . . . . . . . e Repayment of loans from shareholders . . . . . . . . . . . . . . . . . . . . 14b 14c . . . . . . . . . 14d 14e 14f . . . . . . 14g . . . . . . . . . 14i 14j 14k . . . . . . 14l 14m . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15a 15b 15c 15d 15e 15f 16a 16b 16c 16d 16e 14h Form 1120S (2015) Form 1120S (2015) ReconOther ciliation Information Schedule K Page 17a b c d Investment income . . . . . . . . . . . . . . . Investment expenses . . . . . . . . . . . . . . Dividend distributions paid from accumulated earnings and profits Other items and amounts (attach statement) 18 Income/loss reconciliation. Combine the amounts on lines 1 through 10 in the far right column. From the result, subtract the sum of the amounts on lines 11 through 12d and 14l Schedule L Balance Sheets per Books . . . . . . . . . . . . . . . . . . . . . 17a 17b 17c . . . Beginning of tax year Assets (a) 1 2a b 3 4 5 6 7 8 9 10a b 11a b 12 13a b 14 15 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 . . . . . . . . . . Liabilities and Shareholders' Equity 16 17 18 19 20 21 22 23 24 25 26 27 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 . . . . . . . . . . . Additional paid-in capital . . . . . . . Retained earnings . . . . . . . . . Adjustments to shareholders' equity (attach statement) Less cost of treasury stock . . . . . . Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . . . . . . 4 Total amount Shareholders' Pro Rata Share Items (continued) 18 End of tax year (b) (c) (d) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Form 1120S (2015) Form 1120S (2015) Schedule M-1 Page 5 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: The corporation may be required to file Schedule M-3 (see instructions) 1 Net income (loss) per books 2 Income included on Schedule K, lines 1, 2, 3c, 4, 5a, 6, 7, 8a, 9, and 10, not recorded on books this year (itemize) 3 Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 14l (itemize): Depreciation $ Travel and entertainment $ a b 4 Add lines 1 through 3 Schedule M-2 . . . . . . . . . . . . . . 445,000 5 Income recorded on books this year not included on Schedule K, lines 1 through 10 (itemize): a Tax-exempt interest $ 6 Deductions included on Schedule K, lines 1 through 12 and 14l, not charged against book income this year (itemize): a Depreciation $ 7 Add lines 5 and 6 . . . . . 8 Income (loss) (Schedule K, line 18). Line 4 less line 7 Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' Undistributed Taxable Income Previously Taxed (see instructions) (a) Accumulated adjustments account 1 2 3 4 5 6 7 8 Balance at beginning of tax year . . . . . Ordinary income from page 1, line 21 . . . Other additions . . . . . . . . . . ( Loss from page 1, line 21 . . . . . . . ( Other reductions . . . . . . . . . . Combine lines 1 through 5 . . . . . . . Distributions other than dividend distributions Balance at end of tax year. Subtract line 7 from line 6 (b) Other adjustments account 100,000 300,000 ) )( (c) Shareholders' undistributed taxable income previously taxed 25,000 ) Form 1120S (2015)