TAX RETURN PROBLEMS
TAX RETURN PROBLEM 1 (TRP 1 )
CORPORATE TAX RETURN PROBLEM
The Snap-It-Open Fortification incorporated and began operations on January 15 of the ordinary year. Its address is 3701 Commerce Drive, Baltimore, MD 23239. Its mistress identification reckon is 69-7414447. It elects to improve its modeadmonish tax render as a calendar-year fortification and uses the accrual rule of announcementing. It elects the FIFO rule of schedule valuation. JasoriSPrull (SSN 333-33-3333) and Martin Winsock (SSN 555-55-5555) formed the duty. They each contributed $250,000 principal for 50 percent of the 100,000 shares of $1 par esteem store issued and unappropriated. The guild was formed to congregate and market a sole, conglomerate, snap-open umbrella and its duty intelligence command is 339900. These umbrellas are sold to a miscellany of organizations as premiums. The guild lapses the umbrella frames and different types of waterproof structure for the umbrella representative and cov-ers from uncertain manufacturers. It prints the organizations' advertising logos or other designs on the umbrella representative and covers. It then congregates these on the umbrella frames for bestowal to the customer along delay the covers. On January 16, the guild placed in employment two new channels that they had lapsed for $250,000 each for printing and sarcastic the structure for the umbrellas and two used umbrella nock channels lapsed for $200,000 each. The guild obtained a bank hypothecation of $750,000 secured by the channels. Jason and Martin were required to personally insure this hypothecation that has an 8 percent annual attention admonish on the uncompensated counterpoise. The leading main and inter-est cancelment of $160,000 is not due until January 16 of direct year. During the year, the guild lapsed $150,000 of structure and $210,000 of umbrella frames. It rendered one manage of frames esteemd at $5,000 consequently of a shortcoming in the snap-open mechanism and prevalent a principal return for that aggregate. Both Jason and Martin operationed full-time in the duty. Jason was the sales-person for the guild and Martin managed the service and the printing and nock operations. Each prevalent a remuneration of $60,000 for the year. They had six employees delay the subjoined proceedss for the year: $45,000 for an announcementant; $21,000 for a receptionist; $28,000 for each of two print channel operators; and $25,000 for each of two nock channel operators. There are no accrued salaries or taxes as of the end of the ordinary year. FUTA taxes are assessed on the leading $7,000 of compensation at a admonish of 6.0 percent. During the year, the guild had $1,535,000 in umbrella sales and cool $1,180,000 on these sales. They as-well compensated the subjoined appraisements in principal:
Repairs and Maintenance 20,000
Taxes and Licenses (except FICA and FUTA taxes) 10,000
Health Insurance 16,000
Advertising 40,000 Travel (except meals) 20,000
Meals and Entertainment 15,000
Group Term Life Insurance 2,000
As an accrual-basis taxpayer, the guild reordinary $57,500 in attention appraisement on the melody ($750,000 x .08 x 11.5/12) and orderly an remuneration announcement for bad debts resembling to two percent of sales. They reordinary backbiting appraisement for financial announcementing resembling to 10 percent of the lapse appraisement for the new printing channels and 12.5 percent of the lapse appraisement for the used nock channels. Their schedule at year-end consisted of $15,000 of structure and $18,000 of umbrella frames fixed on the FIFO schedule rule. (For plainness, you are merely required to place the factory salaries to the circumspection of consume of goods sold.) The guild made estimated tax cancelments of $40,000 for the year. Required Part a. Prepare a financial announcementing proceeds announcement (anteriorly proceeds tax) and counterpoise subterfuge for Snap-It-Open Fortification for the ordinary year. (Do not obliviate to value FICA and FUTA taxes for all employees.) Part b. Complete a Form 1120 and Form 4562 for Snap-It-Open Fortification using the subjoined attached notification. The fortification wrote off no bad debts for the year and it maximized its consume retrieval waste on the filthy channels lapsed. Use the past conducive tax forms from the IRS Web post at www.irs.gov.
TAX RETURN PROBLEM 2 (TRP 2)
PARTNERSHIP TAX RETURN PROBLEM
The Rite-Way Plumbing Guild began duty three years ago as of March 1 of the ordinary tax year in Sarasota. Its duty address is 124 Division Lane, Sarasota, FL 33645. Its mistress identification reckon is 69-3456789. Its princi-pal duty intelligence is residential plumbing repairs and maintenance; its duty command is 238220. It improves its proceeds tax renders on the calendar-year basis. The duty was formed as a poor firm by two brothers, John Henry (SSN 555-55-5555) and James Henry (SSN 666-66-6666), who operation full-time in the duty, and their father Tom Henry (SSN 888-88-8888), the poor accomplice. The brothers each enjoy a 25 percent attention in the proceeds, forfeiture, and cap-ital of the duty timeliness their father owns a 50 percent attention in proceeds, forfeiture, and principal, but takes no free attention in the duty other than as that of an investor. At the end of the ordinary year, its operations showed principal indelicate receipts of
$1,240,000 and the subjoined principal price items: Salaries and compensation (except John and James) Repairs and Maintenance Rent Taxes and Licenses Advertising Pension Plans (except John and James) $378 2,000 28,000 3 000 183 , 0070 15,000 Health/Dental Insurance 16,000 Representative Purchases 220,000 Truck Appraisement 45,000 Insurance (except health/dental) 65,000 Legal/Professional Fees Service Expenses 63,000000 Utilities/Telephone 8,000 Meals/Entertainment 4,000 Draw—John 75,000 Draw—James 60.000 Total Principal Expenditures $966,000
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more