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. Check figure: Taxable Income (line 30) = $637,700. . On November 17, 2005, Leigh Sheridan and Nicolette Rook opened Heath's Sweets Candy Shop, and incorporated as the shop as Heath, Inc. Their first store was very successful, and they have subsequently opened a chain of Heath's Sweets Candy Shops. As they have grown, they have issued stock to other investors. Currently, Leigh owns 40% of the shares and Nicolette owns 40% of the shares, with the remaining 20% owned by outside investors. Heath Inc.'s business address is 2120 Candy Cane Lane, Great Falls, Montana 59401; its telephone number is (575) 541-1122: and its email address is Heath @sweetcandyshop.com. The employer identification number is 11-1111111, and the principal business activity is Confectionery & nut stores and principal business code is 445292. Leigh is president of the company, and Nicolette is vice president. Leigh and Nicolette are full-time employees of Heath, Inc. Leigh's Social Security number is 123-45-6789, and Nicolette's Social Security number is 987-65-4321.- Heath. Inc. is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Heath, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.' Heath, Inc.'s income statement for 2019 is shown on page 2. Heath, Inc.'s balance sheet is as follows: Cashe Accounts receivable- Inventoriese Stock investment- State of Montana bondse Certificates of Deposite Buildings and other depreciable assets" Accumulated depreciatione Lande Other assetse Total assets Accounts payable- | Other current liabilitiese Mortgages Capital stock Retained Earnings Total liabilities and equity- January 1, 20192 1,200,000 2,062,5004 2,750,0004 2,125,000 375.0004 400,000+ 1,805,0004 (727,000) 812,5004 140,000+ 10,943,000 2,284,0004 175,000+ 4,625,0004 2,500,0004 1,359,000 10,943,000 December 31, 2019. 2 1,250,000 2,247,000++ 3,030,000.- 2,075,000++ 375,000 400,000 1,805,000 (1,602,000 812,5002 178,500+ 10,571,000++ 1,970,7804- 155,000++ 4,575,000 2,500,000 1,370,2204 10,571,000+ Income Statement- Income- Gross sales Sales returns and allowancese Net sales Cost of goods solde Gross profite Dividendse Interest income- State of Montana bonds Certificates of deposit- Gain on sales of stock- Loss due to stock worthlessness Other income Total income- 6,100,000+ (70,000)-- 6,030,000 - (3,100,000 -- 2,930,000-P 18,000 + PP 15,000- 27,500- 42,50022 8,000++ (27,000)- 222,830-- 3,194,330++ 805,000 101,830- 4,000++ 22,000- Expenses Salaries and wagese Taxes (state, local, and payroll) Interest expense- Loan to purchase state bondse Funds borrowed for working capital Warranty expense- Depreciation* Charitable contributions Premiums on key-man life insurance policies Bad debt expense- Other expensese Total expenses + Net income before taxes Federal income taxe Net income per books 26,000- 9,300- 875,000- 40,000- 10,000- 9,800- 483.000- (2,359,930) - 834,400- (213,544) 620,85642 *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. The following additional information is found in the tax working papers: Dividends were from Hager Corporation, a less-than-20%-owned domestic corporation.' The stock sold for a gain was from David, Inc. Heath purchased the stock on 6/2/2013 for $32,000. The stock was sold on 12/20. The worthless stock was purchased on 3/20/2008 for $27,000 and was due to the bankruptcy of Dudd. Inc. Other income includes key officer life insurance proceeds of $150,000.- Included in the state, local and payroll tax expense total of $101.830 is $40.250 of state income tax and $61,580 of payroll tax.+ For tax purposes, depreciation equals $930,000. All contributions were paid in cash during the current year to Great Falls University Actual bad debts for the year were $10,500.- Heath, Inc. declared a $609,636 cash dividend during the current year. During 2019. Heath, Inc. made estimated tax payments of $40.000 each quarter to the IRS.- Salaries and wages includes $200,000 paid to Leigh and Nicolette ($100,000 each).- 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. Check figure: Taxable Income (line 30) = $637,700. . On November 17, 2005, Leigh Sheridan and Nicolette Rook opened Heath's Sweets Candy Shop, and incorporated as the shop as Heath, Inc. Their first store was very successful, and they have subsequently opened a chain of Heath's Sweets Candy Shops. As they have grown, they have issued stock to other investors. Currently, Leigh owns 40% of the shares and Nicolette owns 40% of the shares, with the remaining 20% owned by outside investors. Heath Inc.'s business address is 2120 Candy Cane Lane, Great Falls, Montana 59401; its telephone number is (575) 541-1122: and its email address is Heath @sweetcandyshop.com. The employer identification number is 11-1111111, and the principal business activity is Confectionery & nut stores and principal business code is 445292. Leigh is president of the company, and Nicolette is vice president. Leigh and Nicolette are full-time employees of Heath, Inc. Leigh's Social Security number is 123-45-6789, and Nicolette's Social Security number is 987-65-4321.- Heath. Inc. is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Heath, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.' Heath, Inc.'s income statement for 2019 is shown on page 2. Heath, Inc.'s balance sheet is as follows: Cashe Accounts receivable- Inventoriese Stock investment- State of Montana bondse Certificates of Deposite Buildings and other depreciable assets" Accumulated depreciatione Lande Other assetse Total assets Accounts payable- | Other current liabilitiese Mortgages Capital stock Retained Earnings Total liabilities and equity- January 1, 20192 1,200,000 2,062,5004 2,750,0004 2,125,000 375.0004 400,000+ 1,805,0004 (727,000) 812,5004 140,000+ 10,943,000 2,284,0004 175,000+ 4,625,0004 2,500,0004 1,359,000 10,943,000 December 31, 2019. 2 1,250,000 2,247,000++ 3,030,000.- 2,075,000++ 375,000 400,000 1,805,000 (1,602,000 812,5002 178,500+ 10,571,000++ 1,970,7804- 155,000++ 4,575,000 2,500,000 1,370,2204 10,571,000+ Income Statement- Income- Gross sales Sales returns and allowancese Net sales Cost of goods solde Gross profite Dividendse Interest income- State of Montana bonds Certificates of deposit- Gain on sales of stock- Loss due to stock worthlessness Other income Total income- 6,100,000+ (70,000)-- 6,030,000 - (3,100,000 -- 2,930,000-P 18,000 + PP 15,000- 27,500- 42,50022 8,000++ (27,000)- 222,830-- 3,194,330++ 805,000 101,830- 4,000++ 22,000- Expenses Salaries and wagese Taxes (state, local, and payroll) Interest expense- Loan to purchase state bondse Funds borrowed for working capital Warranty expense- Depreciation* Charitable contributions Premiums on key-man life insurance policies Bad debt expense- Other expensese Total expenses + Net income before taxes Federal income taxe Net income per books 26,000- 9,300- 875,000- 40,000- 10,000- 9,800- 483.000- (2,359,930) - 834,400- (213,544) 620,85642 *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. The following additional information is found in the tax working papers: Dividends were from Hager Corporation, a less-than-20%-owned domestic corporation.' The stock sold for a gain was from David, Inc. Heath purchased the stock on 6/2/2013 for $32,000. The stock was sold on 12/20. The worthless stock was purchased on 3/20/2008 for $27,000 and was due to the bankruptcy of Dudd. Inc. Other income includes key officer life insurance proceeds of $150,000.- Included in the state, local and payroll tax expense total of $101.830 is $40.250 of state income tax and $61,580 of payroll tax.+ For tax purposes, depreciation equals $930,000. All contributions were paid in cash during the current year to Great Falls University Actual bad debts for the year were $10,500.- Heath, Inc. declared a $609,636 cash dividend during the current year. During 2019. Heath, Inc. made estimated tax payments of $40.000 each quarter to the IRS.- Salaries and wages includes $200,000 paid to Leigh and Nicolette ($100,000 each)