solved Melodic Musical Sales, Inc.XX 2021019 2019 Form 1120The purpose of

Melodic Musical Sales, Inc.XX 2021019 2019 Form 1120The purpose of Tax Return is to get you acquainted with the Form 1120 and the related supporting forms.In order to assist you in the preparation of the Tax Return Assignment , I am providing you with the following information:Current year depreciation on property placed in service before 2019:Building ($2,000,000 × 0.02564) $ 51,280Equipment 1 ($250,000 × 0.1249 × 0.5) 15,613Equipment 2 ($500,000 × 0.1249) 62,450Trucks ($100,000 × 0.192) 19,200Total $148,543Current year depreciation on equipment placed in service in 2019:Sec. 179 expensing $600,000Total current-year depreciation $748,543Capital gains and losses for 2019:Short-term capital gain on sale of PDQ stock $ 55,000Long-term capital loss on sale of JSB stock (10,000)Sale of Equipment 1:Selling price$280,000Cost$250,000Minus: Accumulated depreciation(156,288)Adjusted basis(93,712)Gain recognized$186,288Sec. 1245 recapture$156,288Sec. 1231 gain$ 30,000Underpayment penalty:Omit Form 2220 and just insert $3,809 penalty on Form 1120, Page 1, Line 33.Schedule M-3:Omit this scheduleIn reviewing your assignment for completeness, please make sure you fill out all of the following information:The information at the top of Form 1120Schedule K information including answering questions 1 through 25Officers compensation Form 1125-EThe following forms should be includedForm 1120Schedule DForm 8949Form 1125-AForm 1125-EForm 2220Form 4562Form 4797Please keep in mind the balance sheet and income statement presented are book basis and not tax basis therefore there will be reconciling items between book and tax that must appear on the Schedule M-1 of form 1120.I would also like to point out some of the book and tax differences that you need to account for on Schedule M-1 and you hopefully you remember from the introductory tax class as follows:Federal income taxDeferred income taxTax exempt interestCapital lossesDepreciation differencesGain on the sale of equipmentOfficers life insurance premiumsBad debt expense