prepare Sunshine Sunglasses, Inc.'s 2016 Federal income tax return (Form 1120), including all needed supporting statements, schedules, and forms. Unless otherwise noted, assume Sunshine Sunglasses, Inc. follows the policies of making all elections to minimize its current income taxes and, to the extent possible, of conforming procedures for financial and tax accounting. Round amounts to the nearest dollar. If additional information is needed, make realistic assumptions and fill in all required data. The forms that you will need to complete include Forms 1120, 1125-A, 1125-E, 4626, Schedule D and Schedule G.

The corporation's audited income statement and balance sheet for the current year, prepared by the accounting firm of Bering Beaufort, CPA's follows:

STATEMENT OF RETAINED EARNINGS

Beginning Retained Earnings $ 323,969

Net Income for the Year 98,625

Dividend Paid in Cash (64,868)

Ending Retained Earnings $ 357,726

prepare form 1120 , 1125a for corporation

CORPORATION PRACTICE SET Sunshine Sunglasses, Inc. Federal Tax Return FACTS Sunshine Sunglasses Inc. is owned by Raymond J. Smith and his wife, Mary P. Smith. The corporation manufactures children's sunglasses (business activity code number 339900). The corporation has reported positive financial and taxable incomes since inception. The company is located at 200 Sunshine Way, Boca Raton, Florida 33431. The company's employer identification number is 98-7654321, and the calendar year is used for tax purposes. The date of incorporation was February 9, 2008. Raymond J. Smith (social security number 123-45-6789) is an 81 percent shareholder and president of the company. Mary P. Smith (social security number1-111) is a 19 percent shareholder and vice president of the company. Both persons devote 100 percent of their time to the corporation. Raymond's compensation is S187,154 per year, and Mary's compensation is $121,051 for the year. The corporation is not a personal holding company. While the corporation is a 'closely-held C corporation,' it does not engage in activities to which the at-risk or passive activity loss limitations apply. The corporation files its tax return on the accrual method. Inventory has been consistently valued at Cost under the FIFO method using the full absorption procedure. Inventory capitalization rules of Internal Revenue Code Section 263A do not apply due to the 'small business exception' (average annual gross receipts for the three preceding taxable years do not exceed S10 million). The accounting records are computerized. CORPORATION PRACTICE SET Sunshine Sunglasses, Inc. Federal Tax Return FACTS Sunshine Sunglasses Inc. is owned by Raymond J. Smith and his wife, Mary P. Smith. The corporation manufactures children's sunglasses (business activity code number 339900). The corporation has reported positive financial and taxable incomes since inception. The company is located at 200 Sunshine Way, Boca Raton, Florida 33431. The company's employer identification number is 98-7654321, and the calendar year is used for tax purposes. The date of incorporation was February 9, 2008. Raymond J. Smith (social security number 123-45-6789) is an 81 percent shareholder and president of the company. Mary P. Smith (social security number1-111) is a 19 percent shareholder and vice president of the company. Both persons devote 100 percent of their time to the corporation. Raymond's compensation is S187,154 per year, and Mary's compensation is $121,051 for the year. The corporation is not a personal holding company. While the corporation is a 'closely-held C corporation,' it does not engage in activities to which the at-risk or passive activity loss limitations apply. The corporation files its tax return on the accrual method. Inventory has been consistently valued at Cost under the FIFO method using the full absorption procedure. Inventory capitalization rules of Internal Revenue Code Section 263A do not apply due to the 'small business exception' (average annual gross receipts for the three preceding taxable years do not exceed S10 million). The accounting records are computerized