ACCT 429 DeVry University Chicago Tax Form Computations Case Scenario
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
|Gross Sales Receipts||2,410,000|
|Direct Materials purchased||(278,143)|
|Direct other costs||(249,356)|
|Salaries and wages||(442,103)|
|Rent expenses (operating)||(40,000)|
|Charitable contribution (Cash)||(20,000)|
A 2018 comparative balance sheet appears below.
|Building and equipment||138,203||185,348|
|Total liabilities and capita||214,848||$844,422|
|Notes Payable (Less than 1 year)||4,500||2,100|
|Notes payable (more than 1 year)||26,700||24,300|
|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.