Please prepare the 2019 tax return for ABC Corporation. Use the information below to assist with the preparation.I have included the Form 1120 pages 1 thru 6. Please submit a completed page 1 & page 6 of the Form 1120. You must also submit the Book to TAX template that is included in this workbook. I have calculated the tax depreciation for you (Depr_Amort Adj tab) but you are responsible for posting the difference between the financial statement depreciation and the tax depreciation in the Book to tax worksheet attached. * ABC Corporation is a manufacturing company producing particle board. You must complete page 1, including the tax on Line 31. Although page 3, Schedule J is used to calculate the tax, you can just multipy the taxable income that you calculate on Line 28 which will be the same amount on line 30 times 21%. There were no estimated payments made so what you calulate is the Amount Owed. On page 6, you must complete the Schedule L, Balance Sheet p/Books, Schedule M1 and Schedule M2 * Trial Balances for 2019 & 2018 are provided. Although not normally the case, the TB has subtotals in bold print. * Comparative Income Statement for 2019 & 2018 * Comparative Balance Sheet for 2019 & 2018 * Highlighted areas (yellow) in the TB should be looked at closely. * Use the supporting supplemental schedules attached (BK to Tax Tab) for other deductions and taxes to include with your tax return submission. Additional information is provided by ABC Company Management 1 Information that the Penalty that is expensed (Acct 885500) was assessed by the IRS for a prior year adjustment made. Hint: not allowed as a deduction on tax return 2 There was an actual write-off of a Bad debt due to a customer filing bankruptcy. The accrual was reduced by the actual write-off. (See ACCT 125300) 3 Management has set up an accrual for estimated environmental clean-up expenses. The expense is in account 880200 and the accrual account is 208950. 4 All fixed assets and related depreciation are from assets placed in service in 2018 (2 yr in service) except for the $500,000 addition to machinery (Acct 170400) in 2019. The tax depreciation has been calculated for you in the Depr_Amort Adj Tab. You must reflect tha tax depreciation on the tax return and show the adjustment in the BK to Tax worksheet. 5 In December 2019, executive management concluded that one of the companies operating facilities would be closed as a result of new efficiencies in another building. A reserve for plant shutdown in the amount of $300,000 was established in ACCT 208250. There were no payments made in 2019. 6 The company paid a cash dividend to its shareholders, which is reflected in the ACCT 290700. Both the dividend payment and the financial statement net income should be reflected on Schedule M2 7 The other deductions schedule should be used to show all expenses that are not allocated to another line on the Form 1120. The supplemental schedule for other deductions should include all expense accounts for which there is not a specific line item on Form 1120, page 1. 8 Remember that federal income tax is not deductable and that meals & entertainment is subject to only a 50% deduction 9 There were no estimated taxes paid. Answer Skip Exit
