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Completing Form 1120S INSTRUCTIONS: Please use...

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Completing Form 1120S INSTRUCTIONS: Please use the information below to complete the Form 1120S and the Schedule K-1?s for Form 1120S. Blank forms can be found on the Hands-On Assignment Ppage or in Doc Sharing. If you have a tax- software package, please feel free to use the packageit, but be aware that I will not be able to answer specific questions about the software package. GENERAL COMPANY INFORMATION Margaret Brown and Joel Lee each own 50% of Designs Inc. with no other class of stock is authorized. On June 6, 2009, they formed to provide design services. Their business activity code is 541400. Designs Inc.?s business address is 2134 Merry Lane, Las Cruces, NM 08801. The telephone number is (575) 541-1122, and the e-mail address is d..c@cdi.com. The Eemployer identification number is 11-1111111. Margaret is the president of the company, and Joel is the vice- president. Margaret and Joel are the only full-time designers employed by Designs, Inc., and they perform all of the design services of the corporation. Margaret?s Social Security number is 123-45-6789, and Joel?s Social Security number is 555-48-9898. Designs, Inc. is an accrual method, calendar- year taxpayer. Designs, Inc. uses the straight-line method of depreciation for both book and tax purposes. (You are not provided enough detailed data to complete a Form 4562 (depreciation). Enter the amount of depreciation on line 20 of Form 1120.) The corporation does not maintain any inventory. During the year, the corporation distributed cash dividends of $15,192. Designs, Inc. Income Statement Income: Design fees $739,000 Interest income (certificates of deposit) 2,700 Total iIncome $741,700 Expenses: Salaries-?officers: Margaret Brown $190,000 Joel Lee $190,000 $380,000 Salaries-?clerical $61,000 Taxes: Property 26,810 Payroll 23,280 State Incomeincome 3,140 Other miscellaneous 2,390 55,620 Repairs and maintenance 16,340 Meals and entertainment 9,800 Travel 5,600 Charitable contributions 1,200 Interest expense on business loans 31,100 Advertising 17,650 Rental expense 9,270 Depreciation 35,910 Contributions to pension plans 31,000 Employee benefit programs 21,170 Accounting service 13,790 Dues and subscriptions 5,100 Insurance 17,750 Legal and professional services 11,000 Miscellaneous 4,360 Telephone 3,160 Total expenses (730,820) Net income before taxes $ 10,880 Federal income tax (5,192) Net income per books $ 5,688 Designs, Inc. Balance Sheet Assets January 1, 2011 December 31, 2011 Cash $ 35,610 $ 42,580 Accounts Rreceivable 45,100 43,300 Certificates of deposit 134,000 143,000 Depreciable assets 210,922 221,488 Accumulated depreciation (47,520) (83,430) Land 42,000 42,000 Other assets 3,638 2,490 Total Aassets $ 423,750 $ 411,428 ====== ====== Liabilities and Equity January 1, 2011 December 31, 2011 Accounts payable $ 26,550 $ 27,497 Other current liabilities 15,110 17,853 Mortgages 126,000 114,300 Capital stock 200,000 200,000 Retained earnings 56,090 51,778 Total Lliabilities and Eequity $ 423,750 $ 411,428 ====== =======

 

Paper#8155 | Written in 18-Jul-2015

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