SCHEDULE M-3
(Form 1120)
Net Income (Loss) Reconciliation for Corporations
With Total Assets of $10 Million or More
Department of the Treasury
Internal Revenue Service
▶
OMB No. 1545-0123
2017
▶ Attach to Form 1120 or 1120-C.
Go to www.irs.gov/Form1120 for instructions and the latest information.
Employer identification number
Name of corporation (common parent, if consolidated return)
Oh Gnome You Didn't, Inc.
Check applicable box(es):
86-75309
(1)
✔
(3)
Part I
Non-consolidated return
(2)
Consolidated return (Form 1120 only)
Mixed 1120/L/PC group
(4)
Dormant subsidiaries schedule attached
Financial Information and Net Income (Loss) Reconciliation (see instructions)
1a
Did the corporation file SEC Form 10-K for its income statement period ending with or within this tax year?
Yes. Skip lines 1b and 1c and complete lines 2a through 11 with respect to that SEC Form 10-K.
✔ No.
Go to line 1b. See instructions if multiple non-tax-basis income statements are prepared.
b Did the corporation prepare a certified audited non-tax-basis income statement for that period?
✔ Yes. Skip line 1c and complete lines 2a through 11 with respect to that income statement.
No. Go to line 1c.
c Did the corporation prepare a non-tax-basis income statement for that period?
Yes. Complete lines 2a through 11 with respect to that income statement.
No. Skip lines 2a through 3c and enter the corporation’s net income (loss) per its books and records on line 4a.
MM/DD/YYYY
Ending
MM/DD/YYYY
2a Enter the income statement period: Beginning
b Has the corporation’s income statement been restated for the income statement period on line 2a?
Yes. (If “Yes,” attach an explanation and the amount of each item restated.)
✔
c
✔
3a
No.
Has the corporation’s income statement been restated for any of the five income statement periods immediately
preceding the period on line 2a?
Yes. (If “Yes,” attach an explanation and the amount of each item restated.)
No.
Is any of the corporation’s voting common stock publicly traded?
Yes.
No. If “No,” go to line 4a.
b Enter the symbol of the corporation’s primary U.S. publicly traded voting common
stock . . . . . . . . . . . . . . . . . . . . . . . . . .
c Enter the nine-digit CUSIP number of the corporation’s primary publicly traded voting
common stock . . . . . . . . . . . . . . . . . . . . . . .
✔
4a Worldwide consolidated net income (loss) from income statement source identified in Part I, line 1 .
b Indicate accounting standard used for line 4a (see instructions):
(1)
GAAP
(2)
IFRS (3)
Statutory (4)
Tax-basis (5)
Other (specify)
5a Net income from nonincludible foreign entities (attach statement) . . . . . . . . . . . .
b Net loss from nonincludible foreign entities (attach statement and enter as a positive amount) . . .
6a Net income from nonincludible U.S. entities (attach statement) . . . . . . . . . . . . .
b Net loss from nonincludible U.S. entities (attach statement and enter as a positive amount) . . . .
7a Net income (loss) of other includible foreign disregarded entities (attach statement) . . . . . .
b Net income (loss) of other includible U.S. disregarded entities (attach statement) . . . . . . .
c Net income (loss) of other includible entities (attach statement) . . . . . . . . . . . . .
Adjustment to eliminations of transactions between includible entities and nonincludible entities (attach
8
statement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
10a
b
c
11
12
5a (
5b
6a (
6b
7a
7b
7c
571,550
)
)
8
Adjustment to reconcile income statement period to tax year (attach statement) . . . . . . .
9
Intercompany dividend adjustments to reconcile to line 11 (attach statement) . . . . . . . .
10a
Other statutory accounting adjustments to reconcile to line 11 (attach statement) . . . . . . .
10b
Other adjustments to reconcile to amount on line 11 (attach statement) . . . . . . . . . .
10c
571,550
Net income (loss) per income statement of includible corporations. Combine lines 4 through 10 .
11
Note: Part I, line 11, must equal Part II, line 30, column (a), or Schedule M-1, line 1 (see instructions).
Enter the total amount (not just the corporation’s share) of the assets and liabilities of all entities included or removed on the
following lines.
Total Assets
a
b
c
d
4a
Included on Part I, line 4
Removed on Part I, line 5
Removed on Part I, line 6
Included on Part I, line 7
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
▶
Total Liabilities
2,741,494
1,908,768
▶
▶
▶
For Paperwork Reduction Act Notice, see the Instructions for Form 1120.
Cat. No. 37961C
Schedule M-3 (Form 1120) 2017
Page 2
Schedule M-3 (Form 1120) 2017
Employer identification number
Name of corporation (common parent, if consolidated return)
Oh Gnome You Didn't, Inc.
Check applicable box(es): (1)
Check if a sub-consolidated: (6)
86-75309
Consolidated group
1120 group
(7)
(2)
(3)
Parent corp
Consolidated eliminations
(4)
Subsidiary corp
Mixed 1120/L/PC group
1120 eliminations
Employer identification number
Name of subsidiary (if consolidated return)
Part II
(5)
Reconciliation of Net Income (Loss) per Income Statement of Includible Corporations With Taxable
Income per Return (see instructions)
(a)
Income (Loss) per
Income Statement
Income (Loss) Items
(Attach statements for lines 1 through 12)
1 Income (loss) from equity method foreign corporations
2 Gross foreign dividends not previously taxed . . .
3 Subpart F, QEF, and similar income inclusions . .
4 Section 78 gross-up . . . . . . . . . . .
5 Gross foreign distributions previously taxed . . .
6 Income (loss) from equity method U.S. corporations
7 U.S. dividends not eliminated in tax consolidation .
8 Minority interest for includible corporations . . .
9 Income (loss) from U.S. partnerships . . . . .
10 Income (loss) from foreign partnerships . . . .
11 Income (loss) from other pass-through entities . .
12 Items relating to reportable transactions . . . .
13 Interest income (see instructions)
. . . . . .
14 Total accrual to cash adjustment . . . . . . .
15 Hedging transactions . . . . . . . . . .
16 Mark-to-market income (loss) . . . . . . . .
17 Cost of goods sold (see instructions) . . . . .
18 Sale versus lease (for sellers and/or lessors) . . .
19 Section 481(a) adjustments . . . . . . . .
20 Unearned/deferred revenue . . . . . . . .
21 Income recognition from long-term contracts
. .
22 Original issue discount and other imputed interest .
23a Income statement gain/loss on sale, exchange,
abandonment, worthlessness, or other disposition of
assets other than inventory and pass-through entities
b Gross capital gains from Schedule D, excluding
amounts from pass-through entities . . . . .
(b)
Temporary
Difference
(c)
Permanent
Difference
(d)
Income (Loss)
per Tax Return
6,000
(
)
(
(25,000)
c Gross capital losses from Schedule D, excluding
amounts from pass-through entities, abandonment
losses, and worthless stock losses . . . . .
)
25,000
25,000
(25,000)
0
d Net gain/loss reported on Form 4797, line 17,
excluding amounts from pass-through entities,
abandonment losses, and worthless stock losses
e Abandonment losses
. . . . . . . . . .
f Worthless stock losses (attach statement) . . . .
g Other gain/loss on disposition of assets other than inventory
24 Capital loss limitation and carryforward used . . .
25 Other income (loss) items with differences (attach statement)
26 Total income (loss) items. Combine lines 1 through 25
27 Total expense/deduction items (from Part III, line 38)
28 Other items with no differences . . . . . . .
29a Mixed groups, see instructions. All others, combine
lines 26 through 28 . . . . . . . . . .
(19,000)
(614,450)
1,205,000
1,205,000
b PC insurance subgroup reconciliation totals . . .
c Life insurance subgroup reconciliation totals . . .
571,550
30 Reconciliation totals. Combine lines 29a through 29c
Note: Line 30, column (a), must equal Part I, line 11, and column (d) must equal Form 1120, page 1, line 28.
Schedule M-3 (Form 1120) 2017
Page 3
Schedule M-3 (Form 1120) 2017
Employer identification number
Name of corporation (common parent, if consolidated return)
Oh Gnome You Didn't, Inc.
Check applicable box(es): (1)
Check if a sub-consolidated: (6)
86-75309
Consolidated group
1120 group
(7)
(2)
Parent corp
(3)
Consolidated eliminations
(4)
Subsidiary corp
(5)
Mixed 1120/L/PC group
1120 eliminations
Employer identification number
Name of subsidiary (if consolidated return)
Part III Reconciliation of Net Income (Loss) per Income Statement of Includible Corporations With Taxable
Income per Return—Expense/Deduction Items (see instructions)
(a)
Expense per
Income Statement
Expense/Deduction Items
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
U.S. current income tax expense . . . . .
U.S. deferred income tax expense . . . .
State and local current income tax expense .
State and local deferred income tax expense .
Foreign current income tax expense (other
foreign withholding taxes) . . . . . . .
. .
. .
. .
. .
than
.
Foreign deferred income tax expense . . . .
Foreign withholding taxes . . . . . . . .
Interest expense (see instructions) . . . . .
Stock option expense . . . . . . . . .
Other equity-based compensation . . . . .
Meals and entertainment . . . . . . . .
Fines and penalties . . . . . . . . . .
Judgments, damages, awards, and similar costs
Parachute payments . . . . . . . . . .
Compensation with section 162(m) limitation . .
Pension and profit-sharing . . . . . . . .
Other post-retirement benefits . . . . . .
Deferred compensation . . . . . . . . .
Charitable contribution of cash and tangible
property . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
.
(b)
Temporary
Difference
33,986
122,646
34,182
11,689
64,000
11,176
(c)
Permanent
Difference
(d)
Deduction per
Tax Return
(33,986)
(122,646)
34,182
(11,689)
64,000
11,700
20,500
20
21
22
23
Charitable contribution of intangible property
. .
Charitable contribution limitation/carryforward . .
Domestic production activities deduction . . . .
Current year acquisition or reorganization
investment banking fees . . . . . . . .
24 Current year acquisition or reorganization legal and
accounting fees . . . . . . . . . . .
25 Current year acquisition/reorganization other costs .
26 Amortization/impairment of goodwill . . . . .
27 Amortization of acquisition, reorganization, and
start-up costs . . . . . . . . . . . .
28
29
30
31
32
33
34
Other amortization or impairment write-offs
Reserved . . . . . . . . . . .
Depletion . . . . . . . . . . .
Depreciation . . . . . . . . . .
Bad debt expense . . . . . . . .
Corporate owned life insurance premiums
Purchase versus lease (for purchasers
lessees) . . . . . . . . . . . .
. . .
. . .
. . .
. . .
. . .
. . .
and/or
. .
51,800
0
94,827
142,125
13,427
35 Research and development costs . . . . . .
36 Section 118 exclusion (attach statement) . . . .
37 Other expense/deduction items with differences
(attach statement)
. . . . . . . . . .
2,392
38 Total expense/deduction items. Combine lines 1
through 37. Enter here and on Part II, line 27,
reporting positive amounts as negative and
negative amounts as positive . . . . . . .
614,450
Schedule M-3 (Form 1120) 2017
AC312 – Tax Compliance and Provision – Part I Instructions
Your tax senior has e-mailed you Oh Gnome You Didn’t, Inc.’s GAAP-basis trial balance and
financial statements for the 2018 calendar year, prepared using Microsoft Excel, and has asked
you to convert Gnome’s book income into taxable income within the same Excel workbook.
The Excel workbook contains pre-formatted tabs you’ll need to complete to properly calculate
taxable income.
Your tax senior has also asked you to prepare Form 1120, Schedule M-3 for Gnome once you
have finished computing taxable income.
Please read each of the below instructions carefully as you complete this part of the project:
Step 1 – Taxable Income Calculation using Microsoft Excel
1. Open the file titled “Tax Compliance and Provision Project – Parts I and II.xlsx”.
2. The Financial Statements and Trial Balance can be found in the last 2 worksheets of the
Excel workbook.
a. On the “Trial Balance” tab, make sure each of the accuracy checks calculated in
red throughout the worksheet shows a result of zero.
3. You will ONLY be working with the PINK tabs for Part I of this project.
4. Click on the worksheet titled “Perm Book-Tax Differences”.
a. For each type of permanent difference, select the appropriate answer in the
drop-down boxes within each of the cells shaded in GREEN (16 in total).
b. Hint – you will need to use the “Trial Balance” tab to help you determine the
correct “Acct. Number” for the applicable cells.
5. Click on the worksheet titled “Temp Book-Tax Differences”.
a. Select the appropriate answer in the drop-down boxes within each of the cells
shaded in GREEN (31 in total).
b. Hint – you will need to use the “Trial Balance” tab to help you determine the
correct “Acct. Number” for the applicable cells.
c. There are also YELLOW cells (3 in total) that require manual numerical inputs.
Enter 0 if applicable.
d. Also, note the following:
1. Assume that the goodwill and intangibles were purchased on May 1,
2018.
2. Assume that the organizational costs were incurred on March 1, 2018.
6. Once you’ve fully completed the Perm and Temp Book-Tax Differences tabs, select the
“Book-to-tax Rec” worksheet.
a. The accuracy checkpoint should show a variance within +/- 1.0 (cell C30).
7. Save the completed Excel workbook (only the PINK tabs should be completed) and
upload into the applicable Canvas assignment.
Continued…
Step 2 – Preparation of Schedule M-3 (Form 1120)
Your tax senior has also asked you to prepare Form 1120, Schedule M-3 for Gnome once you
have finished computing taxable income.
Option 1
1. Print the file titled “Schedule M-3 – partially completed.pdf”.
2. Complete Parts II and III of Schedule M-3 by hand:
a. Locate the rows with book-tax differences and input the book-tax adjustment
you calculated in Step 1, making sure you properly input the adjustment in the
Temporary or Permanent columns on the Schedule M-3.
i. Compute the resulting taxable income/deduction and input your answer
in column (d) of the applicable row.
b. Hint – in Part III, expense amounts are shown as positive amounts. Therefore, if
a book-tax difference reduces book expense, you will show a negative number in
the Temporary or Permanent columns.
c. The book-tax differences associated with capital losses and income tax expense
have already been completed for you.
d. In Part III, total each column in Row 38 – column (a) has already been totaled for
you.
e. in Part II, subtotal each column in Row 26 as instructed on the form – column (a)
has already been subtotaled for you.
f. In Part II Line 27, fill in the amounts you totaled for each column in (d) above.
g. In Part II, input the total for each column in Row 30, following the specific
instructions on the form.
3. Checkpoint – Schedule M-3 Part II Row 30 column (d) should equal the taxable income
you calculated in Step 1 (on the “Book-to-tax Rec” Excel worksheet).
4. Scan the completed Schedule M-3 and upload into the applicable Canvas assignment.
Option 2
1. Access a fill-able version of Schedule M-3 at the following site:
https://www.irs.gov/pub/irs-pdf/f1120sm3.pdf
2. Download the form to your hard drive.
3. Open the file titled “Schedule M-3 – partially completed.pdf” and input all information
found in that form into your fill-able version of Schedule M-3.
4. Follow the instructions covered in Option 1, #2 above.
5. Checkpoint – Schedule M-3 Part II Row 30 column (d) should equal the taxable income
you calculated in Step 1 (on the “Book-to-tax Rec” Excel worksheet).
6. Save the completed Schedule M-3 and upload into the applicable Canvas assignment.
Oh Gnome You Didn't, Inc.
2018 Effective Tax Rate & Footnote Information
Effective Tax Rate Reconciliation
Tax Effe
Pre-tax book income/(loss)
Computed at the statutory rate (21%)
Tax-exempt income and related expenses
Entertainment expense
Meals expense
State taxes, net of Federal benefit
2018 Income Tax Provision/Effective Tax Rate
0
0
0
0
(9,711)
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
(9,711)
ETR Reconciliation - Proof
Current Federal Provision
Deferred Federal Provision
Total Federal Provision
0
0
0
Current State Provision
Deferred State Provision
Total State Provision
0
0
0
Total Current Provision
Total Deferred Provision
Total Provision
Per ETR Reconciliation
Variance (should be within +/- 1.0)
0
0
0
(9,711)
9,711
#DIV/0!
Tempora
Select from the provided list of options
Manual input is required
***Accuracy Checkpoints Below***
Tax Effects of Temporary Differences
Deferred Tax Assets
Total Deferred Tax Assets
Deferred Tax Liabilities
Tax Attribute C
Tax Effect
0
Tax Effect
Total Deferred Tax Liabilities
0
Net Deferred Tax Liability
0
Temporary Difference Tax Effect - Proof
Total Deferred Provision
Net Deferred Tax Liability
Variance (should be within +/- 1.0)
0
0
0
Tax Attribute Carryforwards
Carryforward Type
Carryforward Amount
Year of Expiration
Oh Gnome You Didn't, Inc.
2018 Current Provision
Select from the provided list of options
Manual input is required
***Accuracy Checkpoint Below***
2018 Federal Income Tax Return
Book Net Income/(Loss)
571,550
Add-Back Income Taxes
168,321
Pre-Tax Book Income/(Loss)
739,871
Permanent Differences
Total Permanent Differences
0
Temporary Differences
Total Temporary Differences
0
Federal Taxable Income
Statutory Income Tax Rate
2018 Federal Income Tax Liability
739,871
21%
155,373
e provided list of options
Checkpoint Below***
2018 State Income Tax Return
Federal Taxable Income
739,871
State Adjustments
Interest Income - Municipal Bond
Investment Expense - Municipal Bond
State Income Tax Expense
Depreciation
Total State Adjustments
0
State Taxable Income
Statutory Income Tax Rate
2018 State Income Tax Liability
739,871
6.25%
46,242
0
Accuracy Checkpoint - Correct Answer
Variance (should be within +/- 1.0)
68,168
(68,168)
Federal Benefit of Current State Tax Liability
9,711
Oh Gnome You Didn't, Inc.
2018 Deferred Provision
Federal In
Book/Tax Difference
Gross DTA/(DTL)
Statutory Income Tax Rate
Net Deferred Tax Asset/(Liability)
State Inc
Book/Tax Difference
Total Gross DTA/(DTL)
Statutory Income Tax Rate, net of Federal benefit
Net Deferred Tax Asset/(Liability)
Select from the provided list of options
Manual input is required
***Accuracy Checkpoint Below***
Federal Income Tax
1/1/2018 Gross 2018 Book/Tax 12/31/2018 Gross
Deferred
Activity
Deferred
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
21%
21%
0
0
State Income Tax
1/1/2018 Gross 2018 Book/Tax 12/31/2018 Gross
Deferred
Activity
Deferred
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4.94%
4.94%
0
0
Asset/Liability
Asset/Liability
Deferred Tax Provision Summary
0
Accuracy Checkpoint - Correct Answer
Variance (should be within +/- 1.0)
134,335
(134,335)
Oh Gnome You Didn't, Inc.
State Income Tax - Modifications to Federal Taxable Income
Depreciation
Acct. Number
Account Name
130
140
150
Furniture & Fixtures
Equipment - Gnome
Equipment - Duck
Tax-Exempt Municipal Bonds
Acct. Number
Interest Income - Municipal Bond
Investment Expense - Municipal Bond
420
565
State Tax Expense
Acct. Number
Account Name
#N/A
Deduction Allowed by State
State Adjustment
Select from the provided list of options
Manual input is required
Asset Cost
45,000
130,000
690,000
865,000
Useful Life
(in months)
Bonus Depr.
Allowance %
84
60
60
Account Name
State Tax
Inclusion
Federal Tax
Inclusion
Interest Income - Municipal Bond
Investment Expense - Municipal Bond
(6,000)
2,392
0
0
Expense
Amount
Impact of State Modification
on Federal Taxable Income
0
0
Bonus
Depreciation
Regular
Depreciation
2018 State Tax
Depreciation
0
0
0
0
6,429
26,000
138,000
170,429
6,429
26,000
138,000
170,429
Tax Depreciation - State Return
Tax Depreciation - Federal Return
170,429
State Adjustment
(170,429)
State
Adjustment
6,000
(2,392)
Impact of State Modification
on Federal Taxable Income
Oh Gnome You Didn't, Inc.
2018 Taxable Income Calculation
Book Net Income/(Loss)
571,550
Non-Deductible Tax Expense
168,321
Permanent Book/Tax Differences
Interest Income - Municipal Bond
Investment Expense - Municipal Bond
Entertainment Expense
Meals Expense
Total Permanent Differences
0
0
0
0
0
Temporary Book/Tax Differences
Depreciation
Prepaid Property Taxes
Capital Loss
Charitable Contributions
Amortization
Organizational Costs
Allowance for Doubtful Accounts
Stock Compensation Expense
Total Temporary Differences
0
0
0
#DIV/0!
#DIV/0!
#DIV/0!
0
0
#DIV/0!
2018 Taxable Income
#DIV/0!
Accuracy Checkpoint - Correct Answer
Variance (should be within +/- 1.0)
161,836
#DIV/0!
***Accuracy Checkpoint Below***
Oh Gnome You Didn't, Inc.
Permanent Book/Tax Differences - Supporting Calculations
Type of Perm Adjustment
Reason for Perm Adjustment
Interest Income - Municipal Bond
Investment Expense - Municipal Bond
Entertainment Expense
Meals Expense
Non-deductible Tax Expense
Federal Current Tax Expense
Federal Deferred Tax Expense
State Deferred Tax Expense
Select from the provided list of options
Manual input is required
Acct. Number
Acct. Number
585
586
591
Account Name
Disallowed %
Amount
for Tax
#N/A
0
#N/A
0
#N/A
#N/A
0
0
Account Name
Federal Current Tax Expense
Federal Deferred Tax Expense
State Deferred Tax Expense
Disallowed Income Tax Expense
Amount
33,986
122,646
11,689
168,321
Schedule M
0
0
0
0
Type of Book/Tax
Difference
Oh Gnome You Didn't, Inc.
Temporary Book/Tax Differences - Supporting Calculations
Allowance for Doubtful Accounts
Acct. Number
Account Name
Beg. Balance
#N/A
0
Account Name
Beg. Balance
#N/A
0
Account Name
Expense
Amount
#N/A
0
Prepaid Property Taxes
Acct. Number
Capital Loss
Acct. Number
Allowable Tax Deduction
Schedule M
0
Account Name
Expense
Amount
Stock Compensation Expense
Acct. Number
#N/A
Allowable Tax Deduction
0
Schedule M
0
Account Name
Asset Cost
#N/A
#N/A
#N/A
0
0
0
Depreciation
Acct. Number
0
Amortization
Acct. Number
Account Name
Asset Cost
#N/A
#N/A
0
0
0
Acct. Number (Book Amortization Expense)
Select from the provided list of options
Manual input is required
End. Balance
0
End. Balance
0
Schedule M
0
Schedule M
0
Type of Book/Tax
Difference
Type of Book/Tax
Difference
Type of Book/Tax
Difference
Type of Book/Tax
Difference
Useful Life
(in months)
84
60
60
Bonus Depr.
Allowance %
Bonus
Depreciation
Regular
Depreciation
0
0
0
0
0
0
0
0
Tax Depreciation
#N/A
Acct. Number (Book Depreciation Expense)
Schedule M
Recovery Period
(in months)
# of Months
2018 Tax
Amortization
#DIV/0!
#DIV/0!
#DIV/0!
Tax Amortization
#N/A
#DIV/0!
0
Schedule M
#DIV/0!
Type of Book/Tax Difference
Organizational Costs
Account Name
Expense
Amount
#N/A
Allowable Tax Deduction
0
#DIV/0!
Schedule M
#DIV/0!
Maximum Immediate Expense
Immediate Expense Phaseout
Allowable Immediate Expense
0
0
Acct. Number
Amortizable Expense
Recovery Period (months)
# of Months in 2018
2018 Org Cost Amortization
Type of Book/Tax
Difference
0
#DIV/0!
Charitable Contributions
Acct. Number
2018 Tax
Depreciation
0
0
0
Account Name
Expense
Amount
#N/A
Allowable Tax Deduction
0
#DIV/0!
Schedule M
#DIV/0!
Tentative Taxable Income
Add: Charitable Contributions
Modified Taxable Income
Tax Deduction Limitation %
Tax Deduction Limitation
#DIV/0!
0
#DIV/0!
#DIV/0!
Type of Book/Tax
Difference
*includes deduction for total charitable contri
0
0
0
0
Type of Book/Tax Difference
Oh Gnome You Didn't, Inc.
Income Statement
For the Year Ended 12/31/2018
Oh Gnome You Didn't, Inc.
Statement of Retained Earnin
For the Year Ended 12/31/20
Service Revenue
1,394,000
Payroll Expense
Rent Expense
Supplies Expense
140,356
36,000
13,955
Net Income
Dividends Paid
Depreciation Expense
Amortization Expense
Organizational Expense
Charitable Contributions
Other SG&A Expense
Total Expenses
142,125
94,827
51,800
20,500
37,384
536,947
Balance at Dec. 31, 2018
Income from Operations
857,053
Interest Income
Total Non-Operating Income/Gain
6,000
6,000
Interest Expense
Loss on Sale of Investment
Total Non-Operating Expense/Loss
64,000
25,000
89,000
Income before Income Taxes
Income Tax Expense
Net Income/(Loss)
774,053
202,503
571,550
Balance at Jan. 1, 2018
ome You Didn't, Inc.
nt of Retained Earnings
Year Ended 12/31/2018
Oh Gnome You Didn't, Inc.
Balance Sheet
As of 12/31/2018
Assets
0
571,550
(150,000)
Cash
Accounts Receivable, net
Other Current Assets
Total Current Assets
632,673
331,773
14,000
978,446
421,550
Bond Investment
100,000
Furniture & Fixtures, net
Equipment, net
Total PP&E, net
36,000
686,875
722,875
Goodwill
Other Intangibles, net
Total Intangibles, net
657,000
283,173
940,173
Total Assets
2,741,494
Liabilities
Accounts Payable
Salaries & Wages Payable
Interest Payable
Income Tax Payable
Other Current Liabilities
Total Current Liabilities
11,000
10,000
64,000
68,168
21,265
174,433
Note Payable
Deferred Tax Liability
1,600,000
134,335
Total Liabilities
1,908,768
Stockholders' Equity
Common Stock
Additional Paid-in Capital
Retained Earnings
AOCI - Stock Options
Total Stockholders' Equity
2,000
398,000
421,550
11,176
832,726
Total Liabilities & Stockholders' Equity
2,741,494
Oh Gnome You Didn't, Inc.
Statement of Cash Flows
For the Year Ended 12/31/2018
Cash from Operating Activities
Cash received from customers
Cash paid in the normal course of operations
Cash paid for organizational costs
Net Cash Provided by Operating Activities
1,048,800
(189,327)
(51,800)
807,673
Cash from Investing Activities
Cash paid to acquire PP&E
Cash paid to acquire capital investments
Cash received from the sale of capital investments
Cash paid to acquire intangible assets
Net Cash Used in Investing Activities
(865,000)
(200,000)
75,000
(1,035,000)
(2,025,000)
Cash from Financing Activities
Cash received from stockholders
Cash received from bank loan proceeds
Cash paid for dividend distributions
Net Cash Provided by Financing Activities
Net increase in cash for the year ended Dec. 31, 2018
Cash Balance at January 1, 2018
Cash Balance at December 31, 2018
400,000
1,600,000
(150,000)
1,850,000
632,673
0
632,673
Oh Gnome You Didn't, Inc.
12/31/2018 Trial Balance
Debit/(Credit) Format
Account
Number
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
200
220
225
230
235
240
245
250
255
300
310
350
355
360
400
410
420
500
505
510
515
520
525
530
535
540
Account Name
Cash
Accounts Receivable
Allowance for Doubtful Accounts
Interest Receivable
Prepaid Property Taxes
Long-term Investment - Municipal Bond
Furniture & Fixtures
Accumulated Depreciation - Furniture & Fixtures
Equipment - Gnome
Accumulated Depreciation - Equipment - Gnome
Equipment - Duck
Accumulated Depreciation - Equipment - Duck
Goodwill
Intangibles - Non-goodwill
Accumulated Amortization
Accounts Payable
Accrued Salaries and Wages Payable
Accrued Payroll Taxes
Accrued Interest - Bank Loan
Accrued Charitable Contributions
Federal Income Tax Payable
State Income Tax Payable
Long-term Note Payable - Bank Loan
Deferred Tax Liability
Common Stock
Additional Paid-in Capital
Retained Earnings
Dividends Paid
AOCI - Nonqualified Stock Options
Service Revenue - Gnome
Service Revenue - Duck
Interest Income - Municipal Bond
Supplies Expense
Rent Expense
Property Tax Expense
Salaries and Wages Expense
Payroll Tax Expense
Stock Compensation Expense - NSOs
Bad Debt Expense
Charitable Contributions
Entertainment Expense
Jan. 1, 2018
Balance
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Dec. 31, 2018
Balance
632,673
345,200
(13,427)
6,000
8,000
100,000
45,000
(9,000)
130,000
(32,500)
690,000
(100,625)
657,000
378,000
(94,827)
(11,000)
(10,000)
(765)
(64,000)
(20,500)
(33,986)
(34,182)
(1,600,000)
(134,335)
(2,000)
(398,000)
0
150,000
(11,176)
(898,000)
(496,000)
(6,000)
13,955
36,000
7,365
120,000
9,180
11,176
13,427
20,500
7,500
545
550
555
560
565
570
575
580
585
586
590
591
Meals Expense
Tax Consulting Services
Organizational Expense
Interest Expense - Bank Loan
Investment Expense - Municipal Bond
Depreciation Expense
Amortization Expense
Capital Loss on Sale of Investment
Federal Current Tax Expense
Federal Deferred Tax Expense
State Current Tax Expense
State Deferred Tax Expense
4,200
2,500
51,800
64,000
2,392
142,125
94,827
25,000
33,986
122,646
34,182
11,689
(571,550)
(571,550)
0
Total Cash
Per SOCF
Variance
632,673
632,673
0
Total Assets
Per Balance Sheet
Variance
2,741,494
2,741,494
0
Total Liabilities
Per Balance Sheet
Variance
(1,908,768)
(1,908,768)
0
Total Equity
Per Balance Sheet
Variance
(832,726)
(832,726)
0
0 Check - s/b 0
Net Loss/(Income)
Per Income Statement
Variance
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