Prepare Form 1120 (with Schedule C, G, J, K, L, M-1, and M-2), Form 1125-A, and 1125-E

1. C Corporation Tax Return (45 points): Helen and Curtis own Monarch Corporation, a C-Corp. Prepare a Form 1120 for Monarch for tax year 2021. Recommended forms: Form 1120 (with Schedule C, G, J, K, L, M-1, and M-2), Form 1125-A, and 1125-E. Note: Recommended does not mean that a form is required, nor does it mean that all required forms are listed. The balance sheet and income statement for Monarch Corp. is as follows: Balance Sheet Assets Cash Trade notes and accounts receivable Inventories State bonds Federal income tax refund Certificates of deposit Stock investments Building and other depreciable assets Accumulated depreciation Land Other assets Total assets Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity January 1, 2019 $ 380,000 308,400 900,000 160,000 -0- 140,000 300,000 240,000 (88,800) 20,000 3,600 $2,363,200 December 31, 2019 $ 337,300 480,280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128,800) 20,000 2,000 $2,564,100 January 1, 2019 $ 300,000 80,300 210,000 500,000 1,272,900 $2,363,200 December 31, 2019 $ 233,880 40,000 200,000 500,000 1,590,220 $2,564,100 Income Statement Income $2,408,000 (80,000) $2,328,000 (920,000) $1,408,000 Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less-than-20%-owned U.S. corporations Interest income: State bonds Certificates of deposit Total income 12,000 $ 14,000 10,000 24,000 $1,444,000 $160,000 160,000 $320,000 290,000 85,000 56,000 $ 12,000 8,000 Expenses Salaries-officers: Helen Curtis Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Business loans Loan to purchase state bonds Advertising Rental expense Depreciation Charitable contributions Employee benefit programs Premiums on term life insurance policies on lives of Nancy Trout and Delores Lake; Kingfisher is the designated beneficiary Total expenses Net income before taxes Federal income tax Net income per books 20,000 6,000 68,000 40,000 15,000 24,000 16,000 (940,000) $ 504,000 (106,680) $ 397,320 Additional Information: Business address: 1234 Fake Street, Norfolk, VA 6872 The employer identification number (EIN) is 11-1111113, and the principal business activity code is 451110. Helen and Curtis each own 50% of the common stock (the only authorized class of stock). Helen is the president of the company, and Curtis is the vice president of the company. Monarch is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Monarch uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes. . During 2021, the corporation distributed cash dividends of $80,000. During 2021, Monarch made estimated tax payments of $27,000 each quarter to the IRS. Note: not enough information is provided to prepare a Form 4562 (which concerns depreciation), use $40,000 as your depreciation number on the 1120. Do not complete a Form 4562