XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. XYZ corporation Income statement for current year Revenue from sales Cost of Goods Sold Gross profit Book Income $ 40,000,000 (27,000,000) $ 13,000,000 300,0001 20,0002 (4,000) 3,0003 50,000 $ 13,369,000 4 Other income: Income from investment in corporate stock Interest income Capital gains (losses) Gain or loss from disposition of fixed assets Miscellaneous income Gross Income Expenses: Compensation Stock option compensation Advertising Repairs and Maintenance Rent Bad Debt expense Depreciation Warranty expenses Charitable donations Meals (all at restaurants) Goodwill impairment Organizational expenditures Other expenses Total expenses Income before taxes Provision for income taxes 7 (7,500,000) (200,000)5 (1,350,000) (75,000) (22,000) (41,090) (1,400,000)? (70,000) 8 (500,000) 9 (18,000) (30,000) 10 (44,000) 11 (140,000 12 $ (11,390,000) $ 1,979,000 (400,000) 13 $ 1,579,000 Net Income after taxes 1120 PG 1 1120 Page 1 Form 1120 OMB No. 1545-0123 U.S. Corporation Income Tax Return For calendar year 2020 or tax year beginning 2020, ending 20 Go to www.irs.gov/Form 1120 for instructions and the latest information. Name 2020 B Employer identification number TYPE XYZ Corporation Department of the Treasury Internal Revenue Service A Check it 1a Consolidated return (attach Form 851) b Lifeonlife consolidated return 2 Personal holding co. (attach Sch. PH) 3 Personal service corp. (see instructions) 4 Schedule M-3 attached OR Number, street, and room or suite no. If a P.O. box, see instructions. C Date incorporated (mm/dd/yy) PRINT 01/01/2021 City or town, state or province, country, and ZIP or foreign postal code D Total assets (see instructions) (4) Address change 1c 2 3 4 Income 5 6 7 8 40.000.000 27,000,000 13,000,000 200,000 8,000 0 3,000 50.000 3,000 50,000 13,314,000 2.500,000 5.000.000 75,000 27,000 22.000 9 10 11 (3) Name E Check if: (1) Initial return (2) Final return change 1a Gross receipts or sales 1a 40,000,000 b Returns and allowances 1b 0 c Balance. Subtract line 1b from line 1a 2 Cost of goods sold (attach Form 1125-A) 3 Gross profit. Subtract line 2 from line 10 4 Dividends and inclusions (Schedule C, line 23) 5 Interest 6 Gross rents 7 Gross royalties 8 Capital gain net income (attach Schedule D (Form 1120)) 9 Net gain or (loss) from Form 4797, Part II, line 17 (attach Form 4797) 10 Other income (see instructions-attach statement) 11 Total income. Add lines 3 through 10 12 Compensation of officers (see instructionsattach Form 1125-E) 13 Salaries and wages (less employement credits) 14 Repairs and maintenance 15 Bad debts 16 Rents 17 Taxes and licenses 18 Interest (see instructions) 19 Charitable contributions 20 Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 21 Depletion 22 Advertising 23 Pension, profit-sharing, etc., plans 24 Employee benefit programs 25 Reserved for future use 26 Other deductions (attach statement) 27 Total deductions. Add lines 12 through 26 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11 29 a Net operating loss deduction (see instructions) 29a 0 Special deductions (Schedule C. line 24) 29b 130.000 12 13 14 15 16 17 18 19 222,040 X 20 1,900,000 21 Deductions (See instructions for limitations on deductions.) 22 1,350,000 23 24 25 26 166,600 X 27 11,262,640 2.051,360 28 b Add lines 29a and 29b 29c 130,000 30 Taxable income. Subtract line 29c from line 28. see instructions 30 1.921,360 31 Total tax (Schedule J, Part I, line 11) 31 392 356 X Tax, 32 2020 net 965 tax liability paid (Schedule J, Part II, line 12) 32 0 33 Total payments, credits, and section 965 net tax liability (Schedule J, Part III, line 23) 33 360,000 Refundable 34 Estimated tax penalty. See instructions. Check if Form 2220 is attached 34 0 Credits, and 35 Amount owed. If line 33 is smaller than the total of lines 31, 32, and 34, enter amount owed 35 392,356 Payments 36 Overpayment. If line 33 is larger than the total of lines 31, 32, and 34, enter amount overpaid 36 37 Enter amount from line 36 you want: Credited to 2021 Refunded 37 estimated tax Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge May the IRS discuss this return with Sign the preparer shown below? See instructions. Here Signature of officer Date Title Yes Print/Type preparer's name Preparer's signature Date PTIN Check if self- Paid employed? Preparer Firm's name Firm's EIN Use Only Firm's address Phone no. For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 114500 Form 1120 (2020) THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL. 2021 McGraw-Hill Education. No