tax homework
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tax.zipAcct 441 S Corporation Tax Return Problem.docx
John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2008, its date of incorporation. The following information was taken from the company's 2014 income statement.
|
Interest income |
$ 100,000 |
|
Gross sales receipts |
2,410,000 |
|
Beginning inventory |
9,607 |
|
Direct labor |
(203,102) |
|
Direct materials purchased |
(278,143) |
|
Direct other costs |
(249,356) |
|
Ending inventory |
3,467 |
|
Salaries and wages |
(442,103) |
|
Officers' salaries |
(150,000) |
|
Repairs |
(206,106) |
|
Depreciation expense |
(15,254) |
|
Interest expense |
(35,222) |
|
Rent expense (operating) |
(40,000) |
|
Taxes |
(65,101) |
|
Charitable contributions (cash) |
(20,000) |
|
Advertising expenses |
(20,000) |
|
Payroll penalties |
(15,000) |
|
Other deductions |
(59,899) |
|
Book income |
704,574 |
A comparative balance sheet appears below.
Premium's accounting firm provides the following additional information.
|
Distributions to shareholders |
$100,000 |
|
Beginning balance, Accumulated adjustments account |
111,148 |
Using the preceding information, prepare a complete Form 1120S and Schedule K–1s for John Parsons and George Smith, 5607 20th Street, Cut and Shoot, TX 77303. Do not complete the Form 4562. If any information is missing, make realistic assumptions.
