Required: Complete Blue catering Service Inc.'s (BCS) 2019 Form 1120 (except for Schedule K and Schedule M-2), Schedule D, and Schedule G using the information provided below. Because the 2019 federal tax forms are not currently available, we have to use the 2018 tax forms. Use the 21% flat corporate income tax rate to calculate tax liability. Form 4562 for depreciation is not required. Include the amount of tax depreciation given in the problem on the appropriate line on the first page of Form 1120. Assume that BCS does not owe any alternative minimum tax. If any information is missing, use reasonable assumptions to fill in the gaps. The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms. You need to turn in two parts of your work below: 1. Paper submission. Fill out Form 1120 (exclude Schedule K and M-2), Schedule D and Schedule G, which are posted under Files/Tax Return Project. Print them on paper and turn them in on Dec 9 (in class). 2. Online submission. You also need to use Excel to demonstrate your understanding of the calculation process and provide tax advice related to charitable contribution. Go to Canvas/Files/Tax Return Project and download the Tax Return Project Excel file. This is the file for you to build your work. The online submission is also due on Dec 9. o In the BTD tab, please provide the calculation of book-tax differences using the format below: Item name Book Tax Difference Favorable/Unfavorable o o In the Taxable income tab, provide the calculation of taxable corporate income in a way similar to the Form 1120 (line la-line 28). You need to reference line items to the book-tax difference worksheet (BTD tab) when applicable. In the Charitable contribution tab, BCS is considering making a charitable contribution that will be fully deductible in the 2019 tax return. Please advise BCS the maximum amount of charitable contribution that will be fully deductible in 2019 and provide your calculation (you need to reference to numbers in the BTD and Taxable income tabs). You do not need to use the deduction to calculate a new taxable income. BCS Income Statement For year ending December 31, 2019 Revenue from sales $1,800,000 Sales returns and allowances (5,000) Cost of goods sold (350,000) Gross profit from operations $1,445,000 Other income: Capital loss (15,000) Dividend income 25,000 Interest income 10,000 Gross income $1,465,000 Expenses: Compensation (950,000) Depreciation (10,000) Bad debt expense (15,000) Meals and entertainment (3,000) Maintenance (6,000) Property taxes (11,000) State income taxes (45,000) Other taxes (44,000) Rent (60,000) Salary (5,000) Advertising (52,000) Professional services (16,000) Employee benefits (32,000) Supplies (5,000) Other expenses (27,000) Total expenses (1,281,000) Income before taxes 184,000 Federal income tax expense (62,000) Net income after taxes $ 122,000 1. BCS's inventory-related purchases during 2019 were $360,000. It values its inventory based on cost using the FIFO inventory cost flow method. Assume the rules of $263A do not apply to BCS. 2. Of the $10,000 interest income, $1,250 was from a City of Irvine bond that was used to fund public activities (issued in 2015), $1,750 was from an Oceanside city bond used to fund private activities (issued in 2010), $1,000 was from a U.S. Treasury bond, and the remaining $6,000 was from a money market account. 3. BCS's dividend income came from Clever Cakes Inc. (CC). BCS owned 10,000 shares of the stock in Clever Cakes at the beginning of the year. This represented 10 percent of SSM outstanding stock. 4. On October 1, 2019, BCS sold 1,000 shares of its CC stock for $25,000. It had originally purchased these shares on April 18, 2014, for $40,000. After the sale, BCS owned 9 percent of CC. Required: Complete Blue catering Service Inc.'s (BCS) 2019 Form 1120 (except for Schedule K and Schedule M-2), Schedule D, and Schedule G using the information provided below. Because the 2019 federal tax forms are not currently available, we have to use the 2018 tax forms. Use the 21% flat corporate income tax rate to calculate tax liability. Form 4562 for depreciation is not required. Include the amount of tax depreciation given in the problem on the appropriate line on the first page of Form 1120. Assume that BCS does not owe any alternative minimum tax. If any information is missing, use reasonable assumptions to fill in the gaps. The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms. You need to turn in two parts of your work below: 1. Paper submission. Fill out Form 1120 (exclude Schedule K and M-2), Schedule D and Schedule G, which are posted under Files/Tax Return Project. Print them on paper and turn them in on Dec 9 (in class). 2. Online submission. You also need to use Excel to demonstrate your understanding of the calculation process and provide tax advice related to charitable contribution. Go to Canvas/Files/Tax Return Project and download the Tax Return Project Excel file. This is the file for you to build your work. The online submission is also due on Dec 9. o In the BTD tab, please provide the calculation of book-tax differences using the format below: Item name Book Tax Difference Favorable/Unfavorable o o In the Taxable income tab, provide the calculation of taxable corporate income in a way similar to the Form 1120 (line la-line 28). You need to reference line items to the book-tax difference worksheet (BTD tab) when applicable. In the Charitable contribution tab, BCS is considering making a charitable contribution that will be fully deductible in the 2019 tax return. Please advise BCS the maximum amount of charitable contribution that will be fully deductible in 2019 and provide your calculation (you need to reference to numbers in the BTD and Taxable income tabs). You do not need to use the deduction to calculate a new taxable income. BCS Income Statement For year ending December 31, 2019 Revenue from sales $1,800,000 Sales returns and allowances (5,000) Cost of goods sold (350,000) Gross profit from operations $1,445,000 Other income: Capital loss (15,000) Dividend income 25,000 Interest income 10,000 Gross income $1,465,000 Expenses: Compensation (950,000) Depreciation (10,000) Bad debt expense (15,000) Meals and entertainment (3,000) Maintenance (6,000) Property taxes (11,000) State income taxes (45,000) Other taxes (44,000) Rent (60,000) Salary (5,000) Advertising (52,000) Professional services (16,000) Employee benefits (32,000) Supplies (5,000) Other expenses (27,000) Total expenses (1,281,000) Income before taxes 184,000 Federal income tax expense (62,000) Net income after taxes $ 122,000 1. BCS's inventory-related purchases during 2019 were $360,000. It values its inventory based on cost using the FIFO inventory cost flow method. Assume the rules of $263A do not apply to BCS. 2. Of the $10,000 interest income, $1,250 was from a City of Irvine bond that was used to fund public activities (issued in 2015), $1,750 was from an Oceanside city bond used to fund private activities (issued in 2010), $1,000 was from a U.S. Treasury bond, and the remaining $6,000 was from a money market account. 3. BCS's dividend income came from Clever Cakes Inc. (CC). BCS owned 10,000 shares of the stock in Clever Cakes at the beginning of the year. This represented 10 percent of SSM outstanding stock. 4. On October 1, 2019, BCS sold 1,000 shares of its CC stock for $25,000. It had originally purchased these shares on April 18, 2014, for $40,000. After the sale, BCS owned 9 percent of CC