Lesson 8 case study
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ACC221_L8_template_v12.xlsxCase Study Part 1
| ACC221 Lesson 8 Case Study Template | |
| Name: | |
| MEID: | |
| Part 1 | |
| Use the income statement for Joseph, Inc. to fill in the table following the instructions below. You can access the information from the link in the lesson. | |
| Access the Joseph, Inc. Income Statement. | |
| Complete the items below that would appear on a book/tax reconciliation for Schedule M-1 on the IRS Form 1120, U.S. Corporation Income Tax Return, for Joseph's first year of operations. Based on the data provided in the lesson, enter the appropriate values in the associated cells in the Excel Spreadsheet. Please enter additions as positive whole numbers and subtractions as negative whole numbers. If an amount is zero, enter a zero. Note: The deduction for organizational expenses in the year was $5,707. | |
| Book/Tax Reconciliation for Schedule M-1 | |
| 1 | Net income per books |
| 2 | Federal income tax per books |
| 3 | Depreciation recorded on books not deducted on the return |
| 4 | Charitable contributions recorded on books not deducted on the return |
| 5 | Other expenses recorded on books not deducted on the return |
| 6 | Tax-exempt interest |
| 7 | Depreciation deducted on the return not expensed on the books |
| 8 | Taxable income per tax return |
Case Study Part 2
| ACC221 Lesson 8 Case Study Template | |||
| Name: | |||
| MEID: | |||
| Part 2 | |||
| Lynwood, Inc. is a calendar year, accrual-basis C corporation. | |||
| For each independent situation below, calculate the corporation's taxable income (loss) for its Form 1120, U.S. Corporation Income Tax Return. Column A lists preliminary taxable income excluding additional tax return items shown in Column B. Enter the taxable income (loss) in the associated cells in column C on the spreadsheet below. | |||
| A | B | C | |
| 1 | Preliminary Taxable | Additional Tax | Form 1120 Taxable |
| Income (Loss) | Return Item(s) | Income (Loss) | |
| 2 | $108,000 | $25,000 of charitable contributions | |
| 3 | $166,000 | $17,000 of charitable contributions | |
| 4 | $205,000 | $15,000 of charitable contributions, and $25,000 of dividends from less-than-20%-owned domestic corporations | |
| 5 | $254,000 | $41,000 of dividends received from a 45%-owned domestic corporation | |
| 6 | $83,000 | $10,000 of dividends received from a 10%-owned domestic corporation, and a $20,000 net operating loss carryover from the prior year | |
| 7 | ($47,000) | $10,000 of charitable contributions and $15,000 of dividends received from a 15%-owned domestic corporation | |
| 8 | ($28,000) | $200,000 of dividends received from a 25%-owned domestic corporation | |
