BUSINESS INCOME TAX
Forms to be turned in:
? Schedules C, J, K, L, M-1 & M-2
? Form 1120: 5 pages
? Form 1125-A (COGS): 1 page
? Schedule G: 1 page
? Form 1125-E: 1 page
? Compensation of Officers
Any other schedules/forms generated do not need to be turned in.
Total Income (line 11) 1,430,000
Taxable Income (line 30) 505,600
Amount of refund 3,096
End of tax year total assets
(Schedule L line15) 2,564,100
Upload to : Tax Return #1 Dropbox by 11:59 p.m., Thursday, CT.
During 2013, Pet Kingdom made estimated tax payments of $90,000 each quarter to
the IRS. Prepare a Form 1120 for Pet Kingdom for tax year 2013. Suggested software:
H&R BLOCK At Home.
2. On February 12, 2002, Nancy Trout and Delores Lake formed Kingfisher Corporation to
sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows:
? Kingfisher?s business address is 1717 Main Street, Ely, MN 55731; its telephone number is (218) 555-2211; and its e-mail address is k..[email protected]
? The employer identification number is 11-1111111, and the principal business activity
code is 451110.
? Nancy owns 50% of the common stock and is president of the company, and Delores
owns 50% of the common stock and is vice president of the company. No other class
of stock is authorized.
? Both Nancy and Delores are full-time employees of Kingfisher. Nancy?s Social Security number is 123-45-6789, and Delores?s Social Security number is 987-65-4321.
? Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined
using FIFO and the lower of cost or market method. Kingfisher uses the straight-line
method of deprecation for book purposes and accelerated depreciation (MACRS)
for tax purposes.
? During 2013, the corporation distributed cash dividends of $80,000.
Kingfisher?s financial statements for 2013 are shown below.
Gross sales $2,408,000
Sales returns and allowances (80,000)
Net sales $2,328,000
Cost of goods sold (920,000)
Gross profit $1,408,000
Dividends received from stock
investments in less-than-20%-owned
U.S. corporations 12,000
State bonds $14,000
Certificates of deposit 10,000 24,000
Total income $1,444,000
Nancy Trout $160,000
Delores Lake 160,000 $320,000
Salaries?clerical and sales 290,000
Taxes (state, local, and payroll) 85,000
Repairs and maintenance 56,000
Business loans $12,000
Loan to purchase state bonds 8,000 20,000
Rental expense 68,000
Charitable contributions 15,000
Employee benefit programs 24,000
Premiums on term life insurance policies
on lives of Nancy Trout and Delores
Lake; Kingfisher is the designated
Total expenses ( 940,000)
Net income before taxes $504,000
Federal income tax (171,904)
Net income per books $332,096
* You are not provided enough detailed information to complete a Form 4562 (depreciation). If you solve this problem using H&R BLOCK At Home, enter the amount of deprecation on line 20 of Form 1120.
Assets January 1, 2013 December 31, 2013
Cash $380,000 $335,524
Trade notes and accounts receivable 308,400 480,280
Inventories 900,000 1,012,000
State bonds 160,000 160,000
Federal income tax refund -0- 3,096
Certificates of deposit 140,000 140,000
Stock investments 300,000 300,000
Building and other depreciable assets 240,000 240,000
Accumulated depreciation (88,800) (128,800)
Land 20,000 20,000
Other assets 3,600 2,000
Total assets $2,363,200 $2,564,100
Liabilities and Equity January 1, 2013 December 31, 2013
Accounts payable $300,000 $299,104
Other current liabilities 80,300 40,000
Mortgages 210,000 200,000
Capital stock 500,000 500,000
Retained earnings 1,272,900 1,524,996
Total liabilities and equity $2,363,200 $2,564,100
During 2013, Kingfisher made estimated tax payments of $43,750 each quarter to the
IRS. Prepare a Form 1120 for Kingfisher for tax year 2013. Suggested software: H&R
Jan 10, 2018EXPERT
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