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Packer Corporation, incorporated on January 3, 1984

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Question;Packer Corporation, incorporated on January;3, 1984, is a calendar- year tax payer that uses the accrual method of;accounting. Its employer identification number is 74-1234567. Its address is;1010 West Avenue, San Antonio, Texas 78213. Packer operates a bookstore. Bob;Parks (social security number 000-45-3000) owns 100% of the single class of;stock. Bob resides at 25 Ancient Bend, San Antonio, TX 78248. He receives;$65,000 in salary from Packer in the current year. During the current year;Packer reports the following income and expense items;Gross receipts 595,000;Purchases 300,000;Salaries;Officers 65,000;Other;employees 50,000;Rent Payments 48,000;Taxes: Payroll 9000;Franchise 250;Interest payments 250;Charitable contributions (cash) 8,000;Depreciation (see schedule below) 38,820;Advertising 15,000;Telephone 500;Utilities 17,080;Officer?s life insurance premium;(Firm;is the beneficiary) 1,500;Depreciation Schedule;Asset Cost Prior Depreciation Method Current;year Depreciation;Light Truck $20,000$10,400 MACRS $3,840;Fixtures 200,00077,560 MACRS 34,980;220,00087,960 38,820;A truck purchased seven years earlier for;$8,000 which was fully depreciated using the regular ACRS tables was sold on;May 10 for $3,500. Packer uses the same depreciation method for tax purposes;and for book purposes. The corporation made estimated tax payments on April 14;June 15, September 10, and December 15 of the current year of $2,000 each;(total of $8,000). Its prior year tax liability was $8,000. Packer?s balance;sheet at the beginning and end of the current year is as follows;Assets January 1 December 31;Cash $34,000 $32,420;Other;current assets 0 48,075;Depreciable;assets 228,000 220,000;Minus;Accumulated depreciation (95,960) (126,780);Inventory 125,000 145,000;Total assets 291,040 318,715;Liabilities;and Stockholder?s Equity;Accounts;payables $68,900 $39,475;Common stock 60,000 60,000;Retained earnings;(Unappropriated) 162,140 219,240;Total;liabilities and equity 291,040 318,715;Packer Corporation uses the first-in;first-out inventory method. The corporation does not claim any deduction for;expenses connected with entertainment facilities, living accommodations, or;employees attending foreign conventions. The corporation does not own any stock;in any other corporation and has no interest in or authority over any foreign;bank account or other foreign assets. The corporation did not pay any dividends;in the current year. The other current assets amount at the year-end consists;entirely of marketable securities.;Prepare Form 1120 for Packer Corporation;for the current year. Editor?s Note;In computing the year-end retained earnings balance, Packer expensed $8,000 of;federal income taxes (i.e. the amount paid in estimated taxes during the year).

 

Paper#42938 | Written in 18-Jul-2015

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