I’m trying to learn for my Accounting class and I’m stuck. Can you help?
Below is the information needed to complete the tax form computations. The need to be using the 2019 tax forms and I will provide attachments of both types of forms. I believe I need both type of forms filled out for George and John so I have included two copies of each form.
John Parsons (123-45-6871) 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, 2011, its date of incorporation. The following information was taken from the company’s 2018 income statement. Premium’s book income for the year was $704,574
|
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 expenses |
(15,254) |
|
|
Interest expenses |
(35,222) |
|
|
Rent expenses (operating) |
(40,000) |
|
|
Taxes |
(65,101) |
|
|
Charitable contribution (Cash) |
(20,000) |
|
|
Advertising expenses |
(20,000) |
|
|
Payroll penalties |
(15,000) |
|
|
Other deductions |
(59,899) |
|
|
Book income |
$704,574 |
|
A 2018 comparative balance sheet appears below.
|
1-Jan |
31-Dec |
|
|
Cash |
$47,840 |
$ ? |
|
Accounts Receivable |
93,100 |
123,104 |
|
Inventories |
9,607 |
3,467 |
|
Prepaid expenses |
8,333 |
17,582 |
|
Building and equipment |
138,203 |
185,348 |
|
Accumulated depreciation |
-84,235 |
(?) |
|
Land |
2,000 |
2,000 |
|
Total liabilities and capita |
214,848 |
$844,422 |
|
Accounts payable |
42,500 |
72,300 |
|
Notes Payable (Less than 1 year) |
4,500 |
2,100 |
|
Notes payable (more than 1 year) |
26,700 |
24,300 |
|
Capital stock |
30,000 |
30,000 |
|
Retained earnings |
111,148 |
? |
|
Total liabilities and capital |
214,848 |
$844,422 |
Premium’s accounting firm provides the following additional information.
Cash distributions to shareholders $100,000
Beginning balance, accumulated adjusted account $111,148
Using the preceding information, prepare a complete Form 1120s (Links to an external site.) and Schedule K-1s for John Parsons and George Smith, both of whom live at 5607 20th Street, Cut and Shoot, TX 77303. Do not complete the Forms 1125-A (Links to an external site.), 1125-E (Links to an external site.), and 4562 (Links to an external site.). If any information is missing, make realistic assumptions.
