Prepare Form 1120 and Schedule L, Schedule M-1 and Schedule M-2

30. (Obj. 5) Randolph Manufacturing Company, EIN (46-7299870) was organized on February 1, 1998. Randolph manufactures electronic components. Its business activity code is 3670 . The offices of the company are located at 350 Mission Street, San Jose, CA 95107-4311. Randolph's financial statements are reproduced on the pages that follow. During the year Randolph made estimated federal income tax payments totaling $15,800. If there is any overpayment of taxes, the accounting department has requested that it be applied towards next year's estimated tax. Randolph paid a total of $46,600 of dividends to its shareholders during the year. Randolph preferred stock is held by 17 different shareholders, none of whom own more than 10% of the stock in the company. Randolph's two officers each own 50% of the company's common stock. June Randolph-Rivers is President of the company. Her compensation is $75,000. June's husband, Travis Rivers is Vice-President. His compensation is $66,350. During the year Randolph sold rwo investments. Orange County bonds purchased on July 6, 2004 were sold on November 16, 2019 for $3,215. Randolph's adjusted basis in the bonds was \$3,740. Randolph sold 100 shares of National Acme common stock on March 14, 2019 for $26,300. The stock was purchased for $18,200 on May 9, 2000. The bad debt expense reported on the income statement is based on the reserve method of accounting. Actual bad debts written off during the year were \$7,950. The difference between these two amounts needs to be reported on Schedule M-1 when net income (loss) per books is reconciled with the amount reported on Form 1120, line 28. Prepare Randolph's Form 1120 for the calendar year ended December 31, 2019. June Randolph-Rivers signs the return on April 15, 2019. Assume Form 4562 has been correctly filled out and that $6,068 of depreciation expense reported on the income statement is also the amount of tax depreciation. Also assume Schedule D, Capital Gains and Losses, and Form 1125-E, Compensation of Officers, have been correctly prepared. RANDOLPH MANUFACTURINC COMPANY Comparative Balance Sheets Beginning and End of 2019 ASSETS Cash Notes receivable Accounts receivable Allowance for doubtful accounts Inventories at the lower of cost or market: Raw materials Finished goods Investment in municipal bonds-Orange County, CA As of January 1, 2019 As of December 31, 2019 540,320 \$ 63,600 40,400 32,680 245,790 217,270 (9,400) (8,580) 46,980 77.616 108,756 140,625 27,900 24,160 \begin{tabular}{|c|c|c|} \hline \\ \hline & & \\ \hline & & rows \\ \hline & & \\ \hline & & \\ \hline & (1) & \\ \hline Surtion & & \\ \hline & whithroses & 12002120m \\ \hline & .000000 & 700000 \\ \hline & & 100000 \\ \hline & 10.000s,0000 & \\ \hline & & sonse \\ \hline & & mansos \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ RANOOCPW MANUFACTUKINC COMPANAY } \\ \hline incomeStatemForFourEndedDecemis & For Fear Ended December 31, 2bse & \\ \hline & 51704201 \\ \hline & [xime \\ \hline \multicolumn{3}{|l|}{ Crais profte on uies } \\ \hline \multicolumn{3}{|l|}{ Operiare expernes } \\ \hline Cothen' sabien & stetass & \\ \hline & & \\ \hline Evsens & 2.214 & \\ \hline Moperty taans & & \\ \hline Roprolitams & 1t,yos & \\ \hline Depredintas of thades? & coses & \\ \hline Bed drets emperor & 7390 & \\ \hline Ndvertaine & 29,031 & \\ \hline & & \\ \hline Oiter abrienintration estenet & & \\ \hline \multirow{2}{*}{\multicolumn{3}{|c|}{ fuet operatict income }} \\ \hline Other insorte & & \\ \hline & 12500 & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} Other deduction Iost on sale of Crance County bonds interest eapense Contributions to qualifed chanties Leeal lens Wet income before federat incoene iaves Less estimatod focher income tames Net income cost of goods sold schid Dut Inventories at beginieg of year Materiak bought for mandactien Saluies and wapes Other costs [utifies, depreciasion of wadkinery] Toeal rooda maldable for sale tess imenteries at end of year Coit of goods sold