Using the data above, prepare the form 1120 and related schedules and statements as you deemed necessary under the tax law after the Cares Act. DO NOT PREPARE THE STATE TAX RETURNS. You will use the 2020 forms. You need to prepare an explanation write up on how you treated the items is the facts above. The explanation is meant to determine if you understand the 1120 assignment. Please explain how you determined what is taxable, not taxable, deductible, or not deductible. Use the appropriate authorities to document your conclusions. Also, provide detail computations of your permanent and temporary differences and any other facts in the case.

On November 1, 2008, Joe Morgan 1,000 shares and Sam Arnold 1,000 shares formed ACME Sports, Inc., to manufacture and sell Sporting Goods. In the current year 2020, Ryan Fountain contributed $1,500,000 worth of manufacturing equipment with a tax basis of $500,000 for another 1,000 shares in the Company. Pertinent information regarding ACME Sports, Inc. is summarized as follows: ACME Sports, Inc.'s business address is 1010 Northwest Parkway, Tustin CA 92782: its telephone number is (714) 555-2211. The employer identification number is 11-1111112, and the principal business activity code is 339920. Joe and Sam each owned 50% (33% after Ryan's contribution) of the common stock; Joe is president and Sam is vice president of the company. Ryan is now a 33% investor. He doesn't hold any titles for the corporation. Both Joe and Sam are full-time employees of ACME Sports, Inc. Joe's Social Security number i 123-45-6788, and Sam's Social Security number is 123-45-6787. ACME Sports, Inc. is an accrual method (can't use the cash method because of gross receipts level), calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. ACME Sports, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. During 2020, the corporation distributed cash of $600,000 equally to all shareholders. ACME Sports, Inc.'s GAAP audited financial statements for 2020 are shown in separate file. Depreciation for tax purposes is $750,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120. During 2020, ACME Sports, Inc. made estimated tax payments of $650,000 each quarter to the IRS. Prepare a Form 1120 for ACME Sports, Inc. for tax year 2020. Suggested software: ProConnect Tax Online. On November 1, 2008, Joe Morgan 1,000 shares and Sam Arnold 1,000 shares formed ACME Sports, Inc., to manufacture and sell Sporting Goods. In the current year 2020, Ryan Fountain contributed $1,500,000 worth of manufacturing equipment with a tax basis of $500,000 for another 1,000 shares in the Company. Pertinent information regarding ACME Sports, Inc. is summarized as follows: ACME Sports, Inc.'s business address is 1010 Northwest Parkway, Tustin CA 92782: its telephone number is (714) 555-2211. The employer identification number is 11-1111112, and the principal business activity code is 339920. Joe and Sam each owned 50% (33% after Ryan's contribution) of the common stock; Joe is president and Sam is vice president of the company. Ryan is now a 33% investor. He doesn't hold any titles for the corporation. Both Joe and Sam are full-time employees of ACME Sports, Inc. Joe's Social Security number i 123-45-6788, and Sam's Social Security number is 123-45-6787. ACME Sports, Inc. is an accrual method (can't use the cash method because of gross receipts level), calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. ACME Sports, Inc. uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. During 2020, the corporation distributed cash of $600,000 equally to all shareholders. ACME Sports, Inc.'s GAAP audited financial statements for 2020 are shown in separate file. Depreciation for tax purposes is $750,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120. During 2020, ACME Sports, Inc. made estimated tax payments of $650,000 each quarter to the IRS. Prepare a Form 1120 for ACME Sports, Inc. for tax year 2020. Suggested software: ProConnect Tax Online