On January 1, 2020, Scully Enterprises, Inc., was formed to manufacture and sell Memorabilia. In the current year 2021, the went Public and now is listed on the NASDAQ (Ticker Symbol SEIC) is summarized as follows: Scully Enterprises, Inc.s business address is 101 North Parkway, Irvine CA 92780; its telephone number is (714) 505-2211. The employer identification number is 11-1111112, and the principal business activity code is 423910. Joseph Scully and Sam Scully each owned 15% of the common stock; Joseph is President and CEO, and Sam is COO of the company. Ryan Scully is the CFO and doesnt hold any shares. All the officers are full-time employees of Scully Enterprises, Inc. Josephs Social Security number is 123-45-6788, Sams Social Security number is 123-45-6787 and Ryans Social Security Number is 123-95-7894. The Company sold XYZ Company stock at 12/31/2021 that was purchased on 1/02/2021 with IPO proceeds. They purchased 1,000 shares @ 130 per share and sold it @ $230 per share. The Company also has worthless stock in their portfolio. Fenway Enterprises a private company that was purchased for $250,000 on January 1, 2021, and the Company filed for bankruptcy on September 15, 2021. Scully Enterprises, Inc. is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. No inventory reserves were recorded at 12/31/2021. Scully Enterprises, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) but elected straight line for tax purposes. For 2020, first year of operations the Company claimed tax depreciation same as the amount for book purposes. During 2021, the corporation distributed a total of $800,000 to all shareholders during 2021. Scully Enterprises, Inc.s GAAP redacted summarized audited public financial statements for 2021 are shown in separate file. For 2021, the Company claimed deprecation on its Office Equipment for tax purposes for 2021 as noted in the facts in the separate file. You are provided enough detailed data to complete a Form 4562. The current year additions are $500,000 was claimed. In 2020, the Company incurred a Net Operating Loss of $1,500,000 (this its only deferred tax asset at 12/31/2020). This NOL is carrying forward to 2021. The Company elected not to carryback the loss under the CARES ACT in 2020. During 2021, Scully Enterprises, Inc. made all estimated tax payments on January 15, 2022. Ignore any estimated tax penalties. Provision for Income Taxes Prepare a Federal Tax Provision and related tax accounts for financial statement purposes using excel model provided. DO NOT prepare any state tax income tax amounts. You will need to compute income tax expense both current and deferred, federal taxes payable and deferred tax assets or liability. Prepare a rate reconciliation. You will also need to record the tax accounts to close the financial statements noted with TBD. Please provide the journal entities. The tax return taxable income will be the same as the tax provision amounts. Thus, no return to provision differences will exist. Corporate Tax Return You will need to prepare Form 1120 for federal tax purposes for Scully Enterprises, Inc. for tax year 2021. DO NOT prepare any state tax returns. The return should include the 1120 and related statements and forms 1125-A, 1125-E, Schedule D, form 4562 and Schedule M-1 (DO NOT PREPARE Schedule M-3- to do this, you need to indicate in Intuit that Schedule M-1 will be done). Also ignore IRC Section 163(j) limitations. Suggested software: Excel Model provision model in canvas and Pro Connect Tax Online for the tax return. See link below and Canvas. https://www.intuit.com/partners/education-program/products/proconnect-tax-online/student-signup/. Narrative You will need to prepare an explanation write up on how you treated the items is the facts above for tax provision and tax return purposes. The explanation is meant to determine if you understand the relationship between the tax provision and related accounts and form 1120. Please explain how you determined what is taxable, not taxable, deductible, or not deductible. Also, provide detail computations of your permanent and temporary differences and any other facts in the case. Provide your journal entries in your write up. Provide any observations and planning ideas you have for the Company. Your write up should be a single-spaced memorandum format and should be at least 4 pages (minimum). Use the appropriate authorities to document your conclusions. Without authorities you will not receive any credit for the assignment. If the facts aren't in the case, please make your own assumptions and document them. All deductions will be computed using the benefits of the CARES ACT if applicable. This assignment is worth 150 points. Please upload your assignment into Canvas by the due date. Deliverables include the Provision calculation (excel), 1120 and related forms and your narrative memorandum.