S Corporation Tax Return Assignment John Globe (123-45-6781) and George Star (123-45-6782) are 50% and 50% owners, respectively of Scully, Inc. (11-1111120), a Baseball manufacturing company located at 2400 Nutwood Fullerton, CA 92625. Scullys S- election was made effective January 1, 2018. Prior to that Scully was a C Corporation incorporated on 6/15/1980. On 12/31/2020, the Company sold interest in the Land used in the trade or business for $902,000 Cash. The basis of the land was $2,000 purchased on 1/1/2017. No estimated tax payments have been made. The following information was taken from the companys 2020 income statement without regard to the sale to the sale of Land: Interest income $ 100,000 Gross sales receipts 2,410,000 Beginning inventory 9,607 Direct labor (203,102) Direct materials purchased (278,143) Direct other costs (249,356) Ending inventory 3,467 Salaries and wages (442,103) Officers salaries ($75,000 each to Globe and Star) (150,000) Repairs (206,106) Depreciation expense, tax and book (assume Section 179) (15,254) Interest expense (35,222) Rent expense (operating) (40,000) Taxes (65,101) Charitable contributions (cash) (20,000) Advertising expenses (20,000) Payroll penalties (15,000) Other deductions (59,899) Book Income 704,574 Net Unrealized Built-In Gain-Land on 12/31/2019 $500,000 Scullys accounting firm provides the following additional information. Distributions to shareholders $100,000 Beginning balance, Accumulated adjustments account 111,148 W2 wages for QBI 795,205 Balance Sheet 1. Using the preceding information, prepare a 2020 Form 1120S and Schedule K1s for John Globe 25 Newport Blvd, Tustin CA 92782, and George Star, 10 Main Street, Tustin, CA 92782. Complete the Forms 1125A, 1125E, 4562, 4797 and Schedule D and other forms you deem necessary. If any information is missing, make realistic assumptions.

12/31/2020 Cash Accounts Receivable Inventories Prepaid Expenses Building and Equipment Accumulated Depreciation Land 12/31/2019 47,840 93,100 9,607 8,333 138,203 (84,235) 2,000 123,104 3,467 17,582 185,348 ? Total Assets $ 214,848 1,793,922 $ $ 42,500 4,500 26,700 Accounts Payable Notes Payable-Short Term Notes Payable-Long Term Loan to Fenway Federal Taxes Payable Capital Stock Retained Earnings 72,300 2,100 24,300 50,000 ? 30,000 30,000 111,148 ? Total Liabilities and Equity $ 214,848 $ 1,793,922 12/31/2020 Cash Accounts Receivable Inventories Prepaid Expenses Building and Equipment Accumulated Depreciation Land 12/31/2019 47,840 93,100 9,607 8,333 138,203 (84,235) 2,000 123,104 3,467 17,582 185,348 ? Total Assets $ 214,848 1,793,922 $ $ 42,500 4,500 26,700 Accounts Payable Notes Payable-Short Term Notes Payable-Long Term Loan to Fenway Federal Taxes Payable Capital Stock Retained Earnings 72,300 2,100 24,300 50,000 ? 30,000 30,000 111,148 ? Total Liabilities and Equity $ 214,848 $ 1,793,922