Your assignment is to complete the tax return for Omega Corporation based on the financial statements and additional information presented below. This is Omega's first year of operation. The balance sheet is what you will use for the tax return. Do not be concerned with the deferred tax adjustments. Omega's FIN is 65-1234567 and address is 123 Main Street, Scottsdale, AZ 85255. Date of incorporation is 1/1/2014. First complete the Tax Income Statement below and submit it as part of your assignment. You will need to complete the tax return using Forms 1120 and 1125A for 2014 that you can access from the IRS web site (IRS.Gov). The forms are in a PDF format and should be completed by filling in the appropriate line items. Complete on Form 1120 the tax income statement (Pg. 1), Sch. J, Sch. L (balance sheet), Sch. M-1, Sch. M-2. Also complete Form 1125A (Cost of Goods Sold) for Omega Corporation Additional information Inventory: Beginning inventory 1/1/2014 $0 Purchases 2014 $575,000 Ending Inventory 12/31/2014 $25,000 The tax rate used for Omega's taxable income is 34% Omega paid a cash dividend of $50,000 during the year Omega took a $63,000 US Production Activity Deduction Allowable charitable contributions for tax was $76,200 The allowable tax amount for insurance will be recorded with other operating expenses on the tax income statement Omega Corporation Book and Tax Income Statement For year ended 12/31/2014 Book Income Tax Income Difference Sales $1,500,000 Less: Cost of Good Sold (550,000) Gross profit from operations 950,000 Tax exempt interest income 10,000 Capital Loss (8,000) Total Income 952,000 Operating expenses Depreciation (tax depr. = $100,000) 60,000 Interest Expense (on loan to purchase tax exempt bonds) 7,000 Contributions ($76,200 allowed for tax) 80,200 Insurance premium - ($9,000 for Corp. Officer - company beneficiary) 15,000 Bad debt (book = tax) 5,000 Other operating expenses 46,800 Total operating expenses 214,000 US production activity deduction Net income before tax 738,000 Federal tax expense 232,000 Net Income per books $506,000 Federal Tax liability Net income per tax return Omega Corporation Balance Sheet 12/31/2014 Assets Cash $171,000 Accounts receivable 125,000 Less: Allowance for bad debt 0 125,000 Investment - tax exempt bonds 160,000 Inventory 25,000 Other assets 120,000 Fixed Assets 500,000 Less: Accumulated Depreciation 60,000 440,000 Total Assets $1,041,000 Liabilities Accounts payable $20,000 Other S/L liabilities 225,000 Long term liabilities 90,000 Total liabilities 335,000 Stockholder's equity Retained earnings 456,000 Common stock 250,000 Total equity 706,000 Total liabilities and stockholder's equity $1,041,000