Analyzing Tax

Scenario
You are a staff accountant preparing your first Form 1120 for your first client, SageGreen Computer Corporation. Your manager plans to review your prepared tax form each step of the way, starting with page one. This is standard firm policy for the tax manager or partner to review and sign off on clients’ tax returns prepared by the tax staff accountants. For your first deadline, you need to complete page one of the current tax year Form 1120. After you complete page one of the tax form, prepare to explain your thought process and your future considerations for the schedules on this form.

This milestone will help you with Project One as you finalize your Form 1120 and explain your work of preparing the form.

Directions
Complete both Part One and Part Two.

For this milestone, begin to prepare your tax form by using the current version of Form 1120 found on the IRS website (irs.gov). Using the financial information given below, under supporting details, fill in page one of Form 1120. Then, prepare a short email to your manager to have them review your first page. In your email, explain to your manager your plans as you continue to complete the form.

Specifically, you must address the following rubric criteria:

Part One: Tax Form: Preparation of Page One of Form 1120
Complete the header section to include company information, with no errors. Consider the following as you fill out this section of the form:
Significance of the information
Significance of the company’s total assets
Complete section one, Income, with no errors. Consider the following in your work:
Net income per books location on tax return
Cost of goods sold expense inclusion here
Complete section two, Deductions, with no errors. Consider the following in your work:
Think about the separation of compensation of officers from salaries and wages
Expenses that are listed separately from “Other Deductions”
Complete section three, Payments, with no errors. Consider the following in your work:
Examples of tax credits available to corporations
Causes of an estimated tax penalty
Part Two: Email to Reviewing Tax Manager
Discuss any possible issues or limitations while completing page one of Form 1120. Include the following in your response:
Accuracy of information and resources provided by the client
Concerns or suggestions regarding the client’s income or expenses
Explain your plan to continue preparing the remainder of Form 1120. Include the following in your response:
Importance of the remaining sections of the Form 1120
Additional information provided by the client and its connection to the Form 1120
Relationship between schedules and financial statements
What to Submit
Form 1120 (Page One Only)
Submit your prepared Form 1120 PDF, page one only.