On February 12, 2005, Susan Trout and William Fisher formed East Tackle Corporation to sell fishing equipment. Pertinent information regarding East Tackle is summarized as follows: East Tackles business address is 17 Lake Street, Portland, ME 04101; its telephone number is (207) 555-2211; and its e-mail address is EastTackle@et.com. The employer identification number is 11-1125986, and the principal business activity code is 451110. Susan owns 50% of the common stock and is president of the company, and William owns 50% of the common stock and is vice president of the company. No other class of stock is authorized. Susan and William are not related to one another. Both Susan and William are full-time employees of East Tackle. Susans Social Security number is 487-85-6214 and Williams Social Security number is 089-65-4687. East Tackle is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. East Tackle uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes. East Tackles financial statements for 2018 are shown below.

Additional information for 2018:

On February 2, 2018, East Tackle placed in service $50,000 of new equipment in their warehouse. The equipment has a useful life of 7 years for tax purposes. The company has elected to depreciate the equipment under Section 179.

MACRS depreciation of assets that were placed in service prior to 2018 is $42,000.

The company uses the allowance method for doubtful accounts for book purposes. For tax purposes, the direct write-off method is used. During 2018, $15,000 was charged to the allowance account which is the amount of actual write-offs for 2018.

The company made estimated tax payments of $28,000 each quarter to the IRS. The companys 2017 tax liability was $46,000. This information should be reported on Form 2220.

Ignore the accumulated earnings tax.

The corporation paid $140,000 in cash dividends to its shareholders.

The company is not entitled to any tax credits.

Instructions Prepare (1) a book-tax reconciliation Excel spreadsheet and (2) the corporation tax return (Form 1120) for East Tackle Corporation for tax year 2018. The required tax forms are Form 1120, Form 1125-A, Form 1125-E, Form 2220, Form 4562. Schedule M-3 is not required.