I need form 1120 and Form 1065 fill out using the information below.The owners of The Car Wash have asked you to prepare their tax return. Their financial statements are audited by a local certified public accounting (CPA) firm, and they have provided them to you as a reference. A copy of the Income Statement and Balance Sheet have been reproduced below. In your discussion, you obtained the following pieces of additional information to prepare the tax return:Name of business owner: Tim Smith, SSN:123-45-6789Tim Smith’s address: 8765 Warner Street, Huntington Beach, CA 92605Name of business owner: Jack Dillard, SSN: 987-65-4321Jack Dillard’s address: 4321 Courtyard Place, Huntington Beach, CA 92605Business name: The Car WashBusiness address: 1046 Broadway Street, Huntington Beach, CA 92605Business description: Self-Service Car WashEmployer identification number: 99-8877665Date the business started: January 1, 2008Business will file its return using the cash basis of accountingIncome StatementDecember 31, 20XXRevenue:Service revenue$254,603Expenses:Advertising2,520Depreciation31,250Insurance7,260Interest expense36,204Licenses and fees7,260Miscellaneous4,074Office expense8,911Salaries and wages67,460Payroll taxes9,444Employee benefits1,349Professional fees1,210Repairs and maintenance20,674Telephone900Travel1,500Utilities27,752Net income before taxes$26,835Balance SheetJanuary 1, 20XXDecember 31, 20XXAssetsCash$28,638$64,979Buildings and other depreciable assets555,000555,000Accumulated depreciation(62,500)(93,750)Total assets521,138526,229Liabilities and equityLoans183,757167,962Mortgage233,229227,280Equity investment160,000160,000Retained earnings(55,848)(29,013)Total liabilities and equity$521,138$526,229Part IAdjust and make any changed to your IP4 tax returns based on faculty feedback. Include your finished and fully edited version for Part 1.Part IIDeliverable Length: 800–1,100 wordsYour client has been informed that an S corporation is a popular business form and wants to know more about it. Please write a professional memo to your client responding to his inquiry. Be sure to at least discuss the following items:What is an S corporation?When is it advisable to be taxed as an S corporation?How does an organization become an S corporation?If The Car Wash is a corporation, can they be taxed as an S corporation?Why or why not?What criteria must be met?If The Car Wash is a LLC, can it be taxed as an S corporation?If so, what does it need to do to elect S corporation status?How would The Car Wash report and pay tax if it is an S corporation?