Please complete Express Catering, Inc.s 2017 tax return (Please complete the business' Form 1120) based upon the information provided below. If required information is missing, use reasonable assumptions to fill in the gaps. Ignore any Alternative Minimum Tax (AMT) calculations and do not prepare any AMT related forms.

Express Catering, Inc.(EC) is organized in the state of New York as a corporation and is taxed as a C corporation with a calendar year-end. EC operates a delicatessen/bakery in New York City, NY that specializes in mobile food catering for events and gatherings within the tri-state area. ECs address, employer identification number (EIN), and date of incorporation are as follows:

Express Catering, Inc.

257 West 55^th Avenue

New York City, NY 10027

EIN-13-9823459

Date Incorporated: March 17, 2011

ECs address has not changed since its inception.

EC has only common shares issued (no preferred stock). There are currently 10,000 shares of EC common stock issued and outstanding.

EC is owned by four shareholders from the same family: Raphael Giordano (father) and his three children Silvia, Andrea, and Marco. Their personal information is provided below:

Raphael Giordano

160 West 57^th Avenue

New York City, NY 10027

SSN: 356-87-4322

Shares owned 5,500

Silvia Giordano Costa

250 South Main

Hoboken, New Jersey 07030

SSN: 284-58-4583

Shares owned1,500

Andrea Giordano

65 East 55^th Avenue

New York City, NY 10027

SSN: 423-84-2343

Shares owned 1,500

Marco Giordano

160 West 57^th Avenue

New York City, NY 10027

SSN-487-27-4797

Shares owned 1,500

EC uses the accrual method of accounting and follows GAAP. ECis not a subsidiary nor is it in an affiliated group with any other entity. EC is not audited by a CPA firm and has never had a restatement of its income statement. EC reported the following information for the year:

EC did not pay dividends in excess of its current and accumulated earnings and profits.

None of the stock of EC is owned by non-U.S. persons.

EC has never issued publicly offered debt instruments.

EC is not required to file a Form UTP.

EC made several payments in the current year that required the filing of federal Forms 1099. These Forms 1099 were filed timely by EC.

During the year, none of the shareholders of EC changed.

EC has never disposed of more than 65% (by value) of its assets in a taxable, non-taxable, or tax-deferred transaction.

EC did not receive any assets in Section 351 transfers during the year.

All of the questions on Schedule B, Form 1120 should be checked nofor the year.

Additional information:

EC has been rapidly expanding its catering business. This expansion has required a significant amount of new equipment purchases. EC sold some of its liquid investments in order to avoid having to take on debt to fund these purchases. Further, EC invested heavily in its catering business by significantly increasing its advertising budget. EC and its officers expect that revenue increases from these expenditures will begin next year.

Despite being profitable the past few years, EC does not want to carryback net operating loss (if any) generated in the current year. EC believes the next few years will be far more profitable and the losses will be of a greater tax benefit in the future.

The dividends received by EC during the year were paid by Apple, Inc.

EC had its sole municipal bond New York City) redeemed(bought back) in the current year. EC originally purchased the New York City bonds on February 1, 2014 for $100,000 (no premium or discount paid). The bond was redeemed by New York City on February 1, 2017 for $100,000. Both tax basis and proceeds received on this transaction were reported to EC on a form 1099-B.

EC purchased 200 shares of Apple, Inc. on October 10, 2014 for $100,000 (including commission). On July 10, of the current year, EC sold the 200 shares of Apple, Inc. for $350 a share (including commission). Both tax basis and proceeds received on this transaction were reported to EC on a form 1099-B.

During the year, EC contributed $8,000 to the American Lung Association. On December 10, EC paid Madison Advertising $27,500 to design a new catering advertisement campaign for next year. This money represented half of the total $55,000 contractprice.EC expects that the services will be provided and delivered to EC on about June 30, 2018.

EC prepaid an insurance premium of $21,000 in September. The new policy is effective October 1, 2017 through September 30, 2018.

ECs regular tax depreciation for the year is correctly calculated as $350,000 before considering the current year fixed asset additions of $840,000 (see table below). EC wants to claim the fastest recovery method(s) possible on these asset additionswithout electing any 179 expensing.

Total current year asset additions are as follows (all the equipment purchased was new):

Description	Date Purchased	Amount
5-year MACRS Property	October 2, 2017	$480,000
7-year MACRS Property	September 10, 2017	$320,000
Delivery Truck (over 6,000 lbs): 5-year MACRS Property	October 12, 2017	$40,000

EC officer information for the year is as follows (compensation amounts included in total wages on the income statement for all employees):

Name	SSN#	Percent of time devoted to business	Percent of stock owned	Amount of compensation
Raphael Giordano	356-87-4322	100%	55%	150,000
Silvia Costa	284-58-4583	100%	15%	130,000
Andrea Giordano	423-84-2343	100%	15%	130,000
Marco Giordano	487-27-4797	100%	15%	120,000

As reported on the balance sheet (see below), on December 31, 2016 the accrued wages were $44,500 and the accrued bonuses were $45,000. The wages and bonuses were payable to Raphael, Silvia, Andrea, and Marco. These accrued wages and bonuses were paid on January 20, of 2017. Also, as reported on the balance sheet, on December 31, 2017, the accrued wages were $51,500. The wages were owed to Raphael, Silvia, Andrea, and Marco. The accrued wages were paid on January 22, 2018.

All the other employees wages and bonuses were paid on December 31, 2017.

As of December 31, 2016 and December 31, 2017, respectively, EC had accrued vacation payable on its books of $62,500and $73,000. All the 2016 vacation accrual was paid during the period from April 1through November 30, 2017. As of March 15, 2018 EC had paid none of its 2017accrual. All of the vacation accrual amounts for both years were owed to employees other than Raphael, Silvia, Andrea, and Marco. None of the officers had accrued vacation at December 31, 2016 or 2017.

On November 1, a large insurance company paid EC a $100,000 deposit to reserve catering event services on March 18, 2018 at the insurance companys annual meeting in New York City. The money is fully refundable until January 15, 2018. Thereafter, half of the deposit becomes non-refundable.

EC maintains an inventory of several items. Inventory is valued at cost. EC has never changed its inventory method. EC uses specific identification for its inventory. EC has never written down any subnormal goods. The rules of Section 263A (UNICAP) do not apply to EC.

EC did not pay a dividend in the current year.

EC made no estimated tax payments during the current year.

Financial Statements (kept on a GAAP basis):

Express Catering, Inc.

Balance Sheet

Assets	12/31/2016	12/31/2017
Cash	$62,500	$44,000
Accounts Receivable	145,000	177,000
Less: Allowance for Bad Debts	(32,000)	(41,000)
Inventory	59,000	96,000
Publicly traded securities	100,000	0
Tax-exempt bond	100,000	0
U.S. Treasury Bonds	125,000	125,000
Fixed Assets	2,115,000	2,955,000
Less: Acc. Depreciation	(436,500)	(715,000)
Prepaid Insurance	0	15,750
Prepaid Rent	38,500	39,500
Prepaid Advertising	0	27,500
Total Assets:	$2,276,500	$2,723,750

Liabilities and Shareholder's Equity:

Accounts Payable	102,000	131,000
Accrued Bonuses	45,000	0
Accrued Vacation	62,500	73,000
Accrued Wages	44,500	51,500
Event Deposits	0	100,000
Deferred Tax Liability	45,910	14,000
Note Payable-First Bank of NY (Credit Line)	424,000	647,000
Note Payable-EG Capital Equipment Leasing	1,243,000	1,415,000
Capital Stock	1,000	1,000
Additional paid-in Capital	99,000	99,000
Retained Earnings-Unappropriated	209,590	182,250
Total Liablilities and Shareholders' Equity	$2,276,500	$2,723,750

Income Statement for the period ending December 31, 2017

Item	Amount
Income:
Gross Sales	$2,925,000
Less: Returns	(8,500)
Net Sales	2,916,500
Cost of Goods Sold	(1,129,850)
Gross Profit	1,786,650
Dividend Income	2,800
Interest Income-Bank	150
Interest Income-U.S. Treasury	3,000
Municipal Bond Interest Income	1,400
Capital Loss-Shares of Apple, Inc.	(30,000)
Total Income:	1,764,000
Expenses:
Employee Salaries	743,500
Repairs and Maintenance	19,000
Bad Debts	44,000
Rent	230,000
Payroll Taxes	60,000
Licensing Fees	4,500
Property Taxes	12,500
Interest Expense	140,000
Depreciation	278,500
Office Supplies	5,400
Employee Training	3,600
Employee Benefits	24,000
Charitable Contribution	8,000
Advertising	70,000
Meals and Entertainment	3,400
Travel	600
Insurance	19,750
Utilities	142,000
Telephone	14,500
Fedreal Income Tax Expense/(Benefit)	(31,910)
Total Expenses:	1,791,340
Net Income (Loss):	($27,340)