Provided are the 12/31/15 and 12/31/16 balance sheets for Bulldog, Inc. as well as their 2016 income statement.On the basis of the information provided per the financial statements and the notes given below, prepare the book to tax reconciliation for the 2016 tax year, schedule M1, and schedule M2.Schedules and forms are provided for each of these items in Blackboard and should be completed and hard copies turned in on the date specified in the class schedule.

Bulldog, Inc. Book to Tax Reconciliation December 31, 2016 Book income (loss) Permanent differences Total permanent differences - Temporary differences Total temporary differences - Federal taxable income (Before NOL & DRD) Net Operating Loss- enter as negative number (if applicable) Dividends Received Deduction- enter as a negative number (if applicable) Federal taxable income (After NOL & DRD) - - Bulldog, Inc. Balance Sheet 12/31/16 Assets Cash Accounts Receivable Allowance for Doubtful Accounts Net Accounts Receivable Total Current Assets Investments Marketable Securities Property, Plant, & Equipment Accumulated Depreciation Net Property, Plant, & Equipment Intangible Assets Accumulated Amortization Net Intangible Assets Total Long-Term Assets TOTAL ASSETS Liabilities Accounts Payable Accrued Salaries Accrued Bonuses Payroll Liabilities Sales Tax Payable Total Current Liabilities $ 200,000 (14,000) 180,000 (10,000) 186,000 236,000 180,000 24,000 790,000 (220,000) 690,000 (170,000) 570,000 60,000 (12,000) 85,000 (10,000) $ 48,000 822,000 $ 1,058,000 $ 22,000 100,000 15,000 8,200 6,100 151,300 Warranty Payable Accrued Loss on Lawsuit Notes Payable Total Long-Term Liabilities TOTAL LIABILITIES Equity Common Stock Additional Paid-in Capital 50,000 53,000 61,000 508,000 622,000 $ 773,300 1,000 60,000 Retained Earnings 223,700 TOTAL EQUITY $ 284,700 TOTAL LIABILITIES & EQUITY $ 1,058,000 $ 592,600 10,000 4,000 606,600 Income Statement Sales Revenue Dividend Income Unrealized Holding Gains/Losses Total Revenues Cost of Goods Sold Salary Expense Bonus Expense Charitable Contributions Bad Debt Expense Depreciation Expense Legal Expenses Accounting Fees Fines & Penalties Federal Income Tax Expense State Income Tax Expense Payroll Tax Expense Officer's Life Insurance Expense Meals & Entertainment Expense Loss on Lawsuit Loss on Impairment of Goodwill Total Expenses NET INCOME 215,750 120,000 10,000 6,200 6,000 50,000 9,200 8,100 820 32,860 7,250 6,100 4,200 1,260 61,000 25,000 563,740 $ 42,860 Instructions: Provided are the 12/31/15 and 12/31/16 balance sheets On the basis of the information provided per the financial statements and reconciliation for the 2016 tax year, schedule M1, and schedule M2. Sched Blackboard and should be completed and hard copies turned in on the dat 12/31/15 $ 52,000 170,000 222,000 180,000 20,000 520,000 $ 75,000 795,000 $ 1,017,000 $ 30,000 120,000 5,000 9,100 5,300 169,400 62,000 516,500 578,500 $ 747,900 1,000 50,000 Notes & Hints 1 Marketable securities are available-for-sale securities that are su 2 The auditors determined that goodwill was impaired this year a The goodwill is not being amortized for GAAP, but it was purcha The goodwill was orginally purchased for $60,000. The other in 3 New machinery & equipment of $100,000 was purchased this y Tax depreciation on the fixed assets this year is $92,000 (this inc 4 The Allowance for Doubtful Accounts is increased by the estima 5 $8,000 of the bonuses accrued were not paid by 3/15/17. The a 6 The company owns 25% of the stock of another U.S. company a 7 The company has a net operating loss carryover from 2015 of $1 8 Both the payroll liabilities account and sales tax payable accoun 9 All legal and accounting fees relate to items incurred in the norm 10 Bulldog, Inc. paid dividends totalling $37,260 during 2016. 218,100 $ 269,100 $ 1,017,000 15 and 12/31/16 balance sheets for Bulldog, Inc. as well as their 2016 income statement. er the financial statements and the notes given below, prepare the book to tax le M1, and schedule M2. Schedules and forms are provided for each of these items in ard copies turned in on the date specified in the class schedule. ble-for-sale securities that are subject to the mark-to-market rule under GAAP. No securities were purchased or sold this year. odwill was impaired this year and wrote-down goodwill. zed for GAAP, but it was purchased in a taxable business (asset) acquisition 4 years ago. hased for $60,000. The other intangible assets consist of patents & trademarks amortized over the same life for GAAP & tax. $100,000 was purchased this year. There were no sales of fixed assets this year. sets this year is $92,000 (this includes all Section 179, Bonus and MACRS depreciation deductions) ounts is increased by the estimate of bad debt expense and is decreased by write-offs. were not paid by 3/15/17. The accrued bonuses as of 12/31/15 ($5,000) were paid on 5/1/16. tock of another U.S. company and received dividends this year from the company. g loss carryover from 2015 of $12,000. The company elected to waive the carryback period. nt and sales tax payable account meet the recurring items exception rule. ate to items incurred in the normal course of business and meet the definition of Section 162 business expenses. lling $37,260 during 2016. r sold this year. r GAAP & tax. Page 5 Form 1120 (2016) Schedule L Balance Sheets per Books Beginning of tax year (a) Assets 1 Cash . . . . . . . . . . . . 2a b 3 4 5 6 7 8 9 10a b 11a b 12 13a b 14 15 Trade notes and accounts receivable . Less allowance for bad debts . . . Inventories . . . . . . . . . U.S. government obligations . . . Tax-exempt securities (see instructions) Other current assets (attach statement) Loans to shareholders . . . . . Mortgage and real estate loans . . . Other investments (attach statement) . Buildings and other depreciable assets Less accumulated depreciation . . . Depletable assets . . . . . . . Less accumulated depletion . . . . Land (net of any amortization) . . . Intangible assets (amortizable only) . Less accumulated amortization . . . Other assets (attach statement) . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 18 19 20 21 22 Accounts payable . . . . . . . . . Mortgages, notes, bonds payable in less than 1 year Other current liabilities (attach statement) . . Loans from shareholders . . . . . . . Mortgages, notes, bonds payable in 1 year or more Other liabilities (attach statement) . . . . Capital stock: a Preferred stock . . . . b Common stock . . . . Additional paid-in capital . . . . . . . Retained earningsAppropriated (attach statement) Retained earningsUnappropriated . . . Adjustments to shareholders' equity (attach statement) Less cost of treasury stock . . . . . . Total liabilities and shareholders' equity . . End of tax year (b) (c) (d) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Liabilities and Shareholders' Equity 23 24 25 26 27 28 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 . . . . . . 2 Federal income tax per books . . . . . 3 Excess of capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize): 5 Expenses recorded on books this year not deducted on this return (itemize): a b c 6 4 Income recorded on books this year not included on this return (itemize): Tax-exempt interest $ 8 Deductions on this return not charged against book income this year (itemize): a Depreciation . . $ b Charitable contributions $ 9 10 Add lines 7 and 8 . . . . . . Income (page 1, line 28)line 6 less line 9 . Depreciation . . . . $ Charitable contributions . $ Travel and entertainment . $ Add lines 1 through 5 . Schedule M-2 1 2 3 7 . . . . . . . Analysis of Unappropriated Retained Earnings per Books (Line 25, Schedule L) Balance at beginning of year Net income (loss) per books . Other increases (itemize): Add lines 1, 2, and 3 . . . . . . . . . . . . . . . . . . 5 6 7 8 Distributions: a Cash . b Stock . c Property Other decreases (itemize): . . . . . . . . . Add lines 5 and 6 . . . . . . Balance at end of year (line 4 less line 7) Form 1120 (2016)