Need help with my 1120 tax return problem and the attachments.

Extra Credit Tax Return Preparation of tax returns and related schedules can be very helpful in terms of integrating and applying tax concepts. To that end, please prepare the appropriate tax forms and schedules for the problem below. You may use the software provided with your textbook or prepare the forms by hand. Instructions for all forms and schedules may be obtained from the IRS website. A hard copy of your solution with schedules and forms in proper attachment order (stapled or clipped) is to be submitted by April 5th. Check gure: Taxable Income = $1,007,550. On November 17, 2001, Amber Leigh and Andrew Johns formed Flynn, Inc. to sell sporting goods. Pertinent information regarding Flynn, Inc. is summarized as follows: Flynn Inc.'s business address is 2120 Rebecca Lane, Great Falls, Montana 59401; its telephone number is (575) 541-1122; and its email address is Flynn@Flynn.com. The employer identification number is 11-1111111, and the principal business activity code is 451110. Andrew is president of the company, and Amber is vice president. Andrew and Amber are full-time employees of Flynn, Inc. Andrew's Social Security number is 123-45-6789, and Amber's Social Security number is 987-65-4321. Flynn, Inc. is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Flynn, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. Flynn, Inc.'s income statement for 2015 is shown on page 2. Flynn, Inc.'s balance sheet is as follows: ! January 1, 2015 December 31, 2015 Cash 1,200,000 1,750,243 Accounts receivable 2,062,500 2,247,000 Inventories 2,750,000 3,030,000 Stock investment 1,125,000 1,075,000 State of Montana bonds 375,000 375,000 Certificates of Deposit 400,000 400,000 0 3,977 Prepaid federal tax Buildings and other depreciable assets 4,805,000 5,305,000 Accumulated depreciation (727,000) (1,602,000) Land 812,500 812,500 Other assets 140,000 178,500 Total assets 12,943,000 13,575,220 2,284,000 1,975,000 175,000 155,000 Mortgages 4,625,000 4,575,000 Capital stock 2,500,000 2,500,000 Retained Earnings 3,359,000 4,370,220 12,943,000 13,575,220 Accounts payable Other current liabilities Total liabilities and equity ! ! ! The following additional information is found in the tax working papers: Dividends were from Bodhi Corporation, a less-than-20%-owned domestic corporation. The stock sold for a loss was from Leaf & Branch, Co. The stock was purchased on May 3, 2012 for $18,000 and sold on December 20, 2015. Purchases (for COGS) were $2,005,000. Retained earnings are unappropriated. All contributions were paid in cash during the current year to Great Falls University. State income taxes for 2015 were $3,000 (included in the state, local, and payroll tax expense). The actual warranty outlay for the year was $9,600. Actual bad debts for the year were $8,750. For tax purposes, depreciation amounted to $147,000. Flynn, Inc. declared a $345,000 cash dividend during the current year. During 2015, Flynn, Inc. made estimated tax payments of $85,000 each quarter to the IRS. Officers compensation was paid evenly between Mr. Johns and Ms. Leigh ($196,900 each). ! Income Statement Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends Interest income State of Montana bonds Certificates of deposit 27,500 Loss on sale of stock Other income Total income Expenses Salaries - officers Salaries - clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense Loan to purchase state bonds Funds borrowed for working capital 22,000 Advertising Rental expense Depreciation* Charitable contributions Premiums on key-officer life insurance policies Bad debt expense Meals and entertainment Warranty expense Other expenses Total expenses Net income before taxes Federal income tax Net income per books 4,312,500 (150,000) 4,162,500 (1,725,000) 2,437,500 32,800 11,250 38,750 (3,500) 15,500 2,521,050 393,800 545,000 178,500 56,000 4,000 26,000 6,000 68,000 106,000 26,000 20,000 9,800 12,200 9,000 32,000 (1,488,300) 1,032,750 (267,017) 765,733 ! *You are not provided enough detailed information to complete a Form 4562 (depreciation schedule). If you solve this problem using H&R Block At Home, you will have to override the depreciation expense by entering the amount of depreciation on line 20 of Form 1120. A little guidance for the M-3: For Part I: Enter "No" for 1a and 1b, "Yes" for 1c, "No" for 2b, 2c, and 3a. There are no foreign entities for this problem, so you will have numbers on 4a, 11 and 12a only. Part II is for income accounts, Part III is for expense accounts. You input the income statement account balance in column (a) and then the book-tax difference (what you would put on the M-1) in column (b) or (c) depending on whether it is permanent or temporary. Column (d) is the sum of columns (a), (b), and (c) so your book-tax difference should have a sign to make that work mathematically. All amounts in column (a) are entered with a positive sign (including expense accounts). Do not put numbers in column (a) unless there is a book-tax difference. The accounts that do not have book-tax differences are summed and entered in Part II on line 28: Other items with no differences