Please help fill out this Schedule M-1.

Form 1120, Schedule M-1, Page 6 | Review Example 33 and homework 47 in Chapter 17 and read lecture notes!! It's very important that you review the various concepts we learned in Chapter 17. This is the hardest part of the whole case. Net Income per books (agrees with M-2 Line 2) 411,314 Federal Income Tax per books 91,200 Meals - this is the disallowed portion, not deductible 1,000 Charitable contributions deduction carried forward from previous year 6,600 (review rules about carryforwards and % of Tl that can be deducted as learned in Chapter 17, Whatever amount you decide of this 6600 they can deduct has to go on page 1 line 19 as well as on Sched M-1 on the appropriate line) Capital loss carried forward from previous year 1,500 (review rules about how much capital loss a C-corp can deduct and realize this is carried from previous year) Tax Exempt Interest Income 15,300 Life Insurance premiums on officers, not deductible 6,000 Interest Expense related to purchase of muni bonds (not-deductible) 7,500 34,086 ? Books depreciation amount for 2020 Tax depreciation amount for 2020 - see Form 4562 line 22 which should match 1120 Page 1 Calculate amount for either line 5a or 8a, whichever is applicable - not both!!! Be sure to review my notes from Chp 17 and what we learned. If tax deprec deduc is higher than books deduction this year, the excess goes on 8a, more tax deduction, less Tl. If books deprec deduction this year is higher than allowed for tax, the excess books deprec goes on 5a, increases TI. Taxable income (must agree with Page 1, Lines 28) Compute Compute ALL subtotals as required in the schedule! 411,314 7 Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books. Income recorded on books this year 2 Federal income tax per books 91,200 not included on this return (itemize): 3 Excess of capital losses over capital gains 1,500 Tax-exempt interest $ 4 Income subject to tax not recorded on books this year (itemize): 8 Deductions on this return not charged 5 Expenses recorded on books this year not against book income this year (itemize): deducted on this return (itemize): a Depreciation $ a Depreciation b Charitable contributions $ b Charitable contributions Travel and entertainment. 9 Add lines 7 and 8 6 Add lines 1 through 5. 10 Income (page 1, line 28) line 6 less line 9 The Case! Here we go! Duggan Corporation, formed January 2, 2018, is a grain brokerage firm. It is located at 1000 - Tenth Street NW, Salt Lake City, UT 84044. Its employer identification number is 75-1234567. The Corporation uses the cash method of accounting. The Corporation had 1,500 shares of common stock ($100 par value) outstanding. Be sure to enter the other requested information at the top (name, address, EIN, all of the applicable boxes checked or filled in, B, C, D, NOT initial return or final return, do not check). Don't forget to fill in Box D Total Assets after you have completed the Balance Sheet (Schedule L) later in the case. Page 1 of 9 1/9 4/30/2021 12:31 PM A general principle for any and all tax forms: Never enter a number as negative unless it is really a negative number. If you are entering an amount in a field that is a "subtract" field, it has to be positive or the IRS subtracts a negative number, which really adds it! That would throw your return out of balance, so always be sure to enter numbers as positive unless they are truly negative amounts. Another principle: Never write in a shaded box/line on a tax form. Shaded means "do not write in this space!!". One more principle, always round amounts on these tax returns to whole dollars!! Form 1120, Page 1 Total Sales, no returns (lines la and 1c) 3,670,000 ? ? Cost of Goods Sold (see below, total from 1125-A, Line 8): Dividends (see instructions below for Schedule C, page 2 of 1120) Interest Income Gain from Form 4797 (see Form 4797 instructions below) Total Income (Line 11, compute) 8,000 ? ? Deductions: Comp of officers (details on Form 1125-E) Salaries & Wages - Other Repairs & Maint Bad debts Rents Taxes & Licenses Charitable Contributions - see Schedule M-1 Depreciation Exp (see details on Form 4562) Other Deductions, Line 26 (no schedule necessary): Total deductions (Line 27, compute) Taxable income (Line 28, compute) Dividends received deduction (line 29b & 29c, see Schedule C below) Taxable income (Line 30) (Your return MUST compute to this amount!) Total Tax, Line 31 (see Schedule J instructions below) Total payments, Line 33 (see Schedule J instructions below) Amount owed, Line 35 OR Overpayment, Line 36, you compute 160,000 526,000 30,000 11,000 24,000 17,000 ? ? 25,700 ? ? ? 434,157 ? ? Form 1120, Schedule C, Page 2 15,000 Total Dividends received Duggan Corporation owns 25% of another corp's stock. Look in Chapter 17, figure out what percentage your dividends received deduction is. Complete Schedule C, totals carry to page 1 of 1120, lines 4 and 29b and 29c subtotal Watch for Line 9 subtotals!! Be careful to carry subtotals and totals to correct lines of Sch C. Page 2 of 9 2/9 4/30/2021 12:31 PM Form 1120, Schedule J, Page 3 Part 1 Line 2, Income Tax, see page 17-18 in your textbook to compute tax based on flate rate for 2020. Tax is based on Taxable income from Line 30 on page 1 of 1120. This is the only amount for this section, read the form carefully, complete all subtotals required. You should see your tax amount four times in Part I. 4/30/2021 12:31 PM Form 1120, Schedule L (Balance Sheet), Page 6) Beg of year End of Year Assets Cash 340,000 393,313 Trade Notes & Accts Receivable Less Allowance (and compute net, columns b & d) 330,000 25,800 460,000 29,000 Inventories (use these for 1125-A also) Tax Exempt Securities Other Investments 200,000 160,000 90,000 280,000 160,000 90,000 50,000 70,000 Buildings & Other Deprec Assets: Truck 1 (Sold 2020, see Form 4797) Furniture and Office Equipment Equipment purchased 2020 Truck 2 (Purchased 2020) Total Cost Less Accum Depreciation (and compute net, columns b & d) 70,000 65,000 75,000 210,000 116,893 120,000 53,146 Organization Costs Less Accum Amort (and compute net, columns b & d) 3,000 1,200 3,000 1,800 Total Assets (and Box D, top of page 1) Compute Compute 350,000 262,602 Liabilities & Shareholders' Equity Accounts Payable Mortgages, Note - Payable w/in one year Other Current Liabilities Loans from shareholders 15,150 140,000 27,000 140,000 Common Stock (columns a, b, c & d) Retained Earnings-Unappropriated Total Liabs & Equity 150,000 507,704 Compute 150,000 Compute Compute Page 4 of 9 4/9 4/30/2021 12:31 PM Form 1120, Schedule M-1, Page 6 Review Example 33 and homework 47 in Chapter 17 and read lecture notes!! It's very important that you review the various concepts we learned in Chapter 17. This is the hardest part of the whole case. Net Income per books (agrees with M-2 Line 2) 411,314 Federal Income Tax per books 91,200 Meals - this is the disallowed portion, not deductible 1,000 Charitable contributions deduction carried forward from previous year (review rules about carryforwards and % of Ti that can be deducted as learned in Chapter 17, Whatever amount you decide of this 6600 they can deduct has to go on page 1 line 19 as well as on Sched M-1 on the appropriate line) Capital loss carried forward from previous year 1,500 (review rules about how much capital loss a C-corp can deduct and realize this is carried from previous year) Form 1120, Schedule M-1, Page 6 | Review Example 33 and homework 47 in Chapter 17 and read lecture notes!! It's very important that you review the various concepts we learned in Chapter 17. This is the hardest part of the whole case. Net Income per books (agrees with M-2 Line 2) 411,314 Federal Income Tax per books 91,200 Meals - this is the disallowed portion, not deductible 1,000 Charitable contributions deduction carried forward from previous year 6,600 (review rules about carryforwards and % of Tl that can be deducted as learned in Chapter 17, Whatever amount you decide of this 6600 they can deduct has to go on page 1 line 19 as well as on Sched M-1 on the appropriate line) Capital loss carried forward from previous year 1,500 (review rules about how much capital loss a C-corp can deduct and realize this is carried from previous year) Tax Exempt Interest Income 15,300 Life Insurance premiums on officers, not deductible 6,000 Interest Expense related to purchase of muni bonds (not-deductible) 7,500 34,086 ? Books depreciation amount for 2020 Tax depreciation amount for 2020 - see Form 4562 line 22 which should match 1120 Page 1 Calculate amount for either line 5a or 8a, whichever is applicable - not both!!! Be sure to review my notes from Chp 17 and what we learned. If tax deprec deduc is higher than books deduction this year, the excess goes on 8a, more tax deduction, less Tl. If books deprec deduction this year is higher than allowed for tax, the excess books deprec goes on 5a, increases TI. Taxable income (must agree with Page 1, Lines 28) Compute Compute ALL subtotals as required in the schedule! 411,314 7 Schedule M-1 Reconciliation of Income (Loss) per Books With Income per Return Note: The corporation may be required to file Schedule M-3. See instructions. 1 Net income (loss) per books. Income recorded on books this year 2 Federal income tax per books 91,200 not included on this return (itemize): 3 Excess of capital losses over capital gains 1,500 Tax-exempt interest $ 4 Income subject to tax not recorded on books this year (itemize): 8 Deductions on this return not charged 5 Expenses recorded on books this year not against book income this year (itemize): deducted on this return (itemize): a Depreciation $ a Depreciation b Charitable contributions $ b Charitable contributions Travel and entertainment. 9 Add lines 7 and 8 6 Add lines 1 through 5. 10 Income (page 1, line 28) line 6 less line 9 The Case! Here we go! Duggan Corporation, formed January 2, 2018, is a grain brokerage firm. It is located at 1000 - Tenth Street NW, Salt Lake City, UT 84044. Its employer identification number is 75-1234567. The Corporation uses the cash method of accounting. The Corporation had 1,500 shares of common stock ($100 par value) outstanding. Be sure to enter the other requested information at the top (name, address, EIN, all of the applicable boxes checked or filled in, B, C, D, NOT initial return or final return, do not check). Don't forget to fill in Box D Total Assets after you have completed the Balance Sheet (Schedule L) later in the case. Page 1 of 9 1/9 4/30/2021 12:31 PM A general principle for any and all tax forms: Never enter a number as negative unless it is really a negative number. If you are entering an amount in a field that is a "subtract" field, it has to be positive or the IRS subtracts a negative number, which really adds it! That would throw your return out of balance, so always be sure to enter numbers as positive unless they are truly negative amounts. Another principle: Never write in a shaded box/line on a tax form. Shaded means "do not write in this space!!". One more principle, always round amounts on these tax returns to whole dollars!! Form 1120, Page 1 Total Sales, no returns (lines la and 1c) 3,670,000 ? ? Cost of Goods Sold (see below, total from 1125-A, Line 8): Dividends (see instructions below for Schedule C, page 2 of 1120) Interest Income Gain from Form 4797 (see Form 4797 instructions below) Total Income (Line 11, compute) 8,000 ? ? Deductions: Comp of officers (details on Form 1125-E) Salaries & Wages - Other Repairs & Maint Bad debts Rents Taxes & Licenses Charitable Contributions - see Schedule M-1 Depreciation Exp (see details on Form 4562) Other Deductions, Line 26 (no schedule necessary): Total deductions (Line 27, compute) Taxable income (Line 28, compute) Dividends received deduction (line 29b & 29c, see Schedule C below) Taxable income (Line 30) (Your return MUST compute to this amount!) Total Tax, Line 31 (see Schedule J instructions below) Total payments, Line 33 (see Schedule J instructions below) Amount owed, Line 35 OR Overpayment, Line 36, you compute 160,000 526,000 30,000 11,000 24,000 17,000 ? ? 25,700 ? ? ? 434,157 ? ? Form 1120, Schedule C, Page 2 15,000 Total Dividends received Duggan Corporation owns 25% of another corp's stock. Look in Chapter 17, figure out what percentage your dividends received deduction is. Complete Schedule C, totals carry to page 1 of 1120, lines 4 and 29b and 29c subtotal Watch for Line 9 subtotals!! Be careful to carry subtotals and totals to correct lines of Sch C. Page 2 of 9 2/9 4/30/2021 12:31 PM Form 1120, Schedule J, Page 3 Part 1 Line 2, Income Tax, see page 17-18 in your textbook to compute tax based on flate rate for 2020. Tax is based on Taxable income from Line 30 on page 1 of 1120. This is the only amount for this section, read the form carefully, complete all subtotals required. You should see your tax amount four times in Part I. 4/30/2021 12:31 PM Form 1120, Schedule L (Balance Sheet), Page 6) Beg of year End of Year Assets Cash 340,000 393,313 Trade Notes & Accts Receivable Less Allowance (and compute net, columns b & d) 330,000 25,800 460,000 29,000 Inventories (use these for 1125-A also) Tax Exempt Securities Other Investments 200,000 160,000 90,000 280,000 160,000 90,000 50,000 70,000 Buildings & Other Deprec Assets: Truck 1 (Sold 2020, see Form 4797) Furniture and Office Equipment Equipment purchased 2020 Truck 2 (Purchased 2020) Total Cost Less Accum Depreciation (and compute net, columns b & d) 70,000 65,000 75,000 210,000 116,893 120,000 53,146 Organization Costs Less Accum Amort (and compute net, columns b & d) 3,000 1,200 3,000 1,800 Total Assets (and Box D, top of page 1) Compute Compute 350,000 262,602 Liabilities & Shareholders' Equity Accounts Payable Mortgages, Note - Payable w/in one year Other Current Liabilities Loans from shareholders 15,150 140,000 27,000 140,000 Common Stock (columns a, b, c & d) Retained Earnings-Unappropriated Total Liabs & Equity 150,000 507,704 Compute 150,000 Compute Compute Page 4 of 9 4/9 4/30/2021 12:31 PM Form 1120, Schedule M-1, Page 6 Review Example 33 and homework 47 in Chapter 17 and read lecture notes!! It's very important that you review the various concepts we learned in Chapter 17. This is the hardest part of the whole case. Net Income per books (agrees with M-2 Line 2) 411,314 Federal Income Tax per books 91,200 Meals - this is the disallowed portion, not deductible 1,000 Charitable contributions deduction carried forward from previous year (review rules about carryforwards and % of Ti that can be deducted as learned in Chapter 17, Whatever amount you decide of this 6600 they can deduct has to go on page 1 line 19 as well as on Sched M-1 on the appropriate line) Capital loss carried forward from previous year 1,500 (review rules about how much capital loss a C-corp can deduct and realize this is carried from previous year)