A long time ago in a far, far away land (Albion, Michigan),WTF! Inc., a novelty toy manufacturing company, hired you to prepare their2019corporate income tax return.

WTF! (12-1212666) is located at 1.3 Ismygpa Street, Albion Michigan, 49224. The company was incorporated on May 15, 1979 (back in the days when disco music was fresh). They manufacture a variety of toys and gag gifts aimed at the high school and college crowd. Examples of past popular products include: supersize disco balls, bell-bottom jeans, strobe lights, lava lamps, stuffed animals, and their best-selling product to date, the two literBierstiefel. Their principal business code is 18000.

WTF! is currently a privately-held corporation with over 100 shareholders. One shareholder, the original founder and CEO, Dr. William T. Frankenfurter owns directly 50% of the voting stock. Dr. Frankenfurter (SSN 513-12-6789) lives in a small castle outside of town at 1975 Time Warp Lane, Marshall, Michigan 49068. WTF! does notown directly or indirectly any foreign entities nor is the firm owned by any outside foreign entities.

WTF! Management team includes Dr. Frankenfurter CEO, Janet Weiss CFO, Rock E. Horror, VP R&D, Brad Majors, VP Sales, and Richard (Riff) Raff, VP Operations.

WTF! is an accrual method, calendar year taxpayer. Inventories are determined using the FIFO and the lower of cost or market method. All products are manufactured or assembled in the United States although some materials are outsourced from foreign countries. The firm uses the straight-line method of depreciation for book purposes and the MACRS tables for tax purposes and the firm uses the straight-line method of amortization of intangibles for both book and tax as allowed by law.

Over the years the firm has grown through both normal operations and by acquisitions. According to Ms. Weiss, the companys long-term goal is to go public with an IPO in the next five years. Besides preparing the current year tax return, she is looking for guidance from you given the recent tax law changes.

Below are the December 31, 2019 GAAP prepared financial statements (Income Statement and Balance Sheets) for your review. Additional comments and footnotes are presented afterward.

You are required to prepare are necessary tax forms and supporting documents to file a complete 2019 tax return and write a letter to the CFO (Ms. Weiss) about future (2020) tax planning opportunities and obstacles to consider.

Please download all required tax forms from the IRS.gov website, useExcelto create all required supporting schedules, and write the 2020 tax planning memo inWord.