Tammy Adams and Fernando Hernandez each own 50% of Custom Designs, Inc. (CDI). On May 6, 2004, they formed CDI to provide architectural services. CDIs information is summarized as follows:

• CDI s business address is 2120 Adobe Drive, Las Cruces, NM 88011; its employer identification number is 11-1111111, and the principal business activity code is 541310.

CDIs financial statement for 2021 is show below:

Income
Professional fees	739,000
Long-term capital gain	5,000
Short-term capital gain	8,000
Long-term capital loss	6,000
Dividends distributed from Gary Inc. (CDI ownership in Gary is 17%)	20,000
Interest income State bonds $18,000 Corporate bonds 24,000	42,000
Life insurance proceeds on the death of a key employee	500,000
Total income	1,308,000

Expenses
Salaries-officers Tammy Adams: 190,000 Fernando Hernandez: 190,000	380,000
Salaries -clerical	61,000
Taxes (state, local , and payroll)	55,620
Advertising	17,650
Rental expenses	9,270
Repairs and maintenance	16,340
Interest expenses: On loan to purchase state bonds On corporate bonds	10,500 25,000
Depreciation* (depreciation for tax purpose is $42,000)	35,000
Business Meals	9,800
Total expenses	620,180
Net income before taxes	687,820
Tax	144,442
Income after tax	543,378

During 2021, CDI made estimated tax payment of $10,000 each quarter to the IRS.

Prepare a Form 1120 page 1 and schedule M-1 on page 6 for CDI for tax year 2021 (Check your figure: Taxable income: $168220)

Also: report dividend income of $20000 on line 4 and do not forget report DRD of $10000 on line 29b