On February 12, 2003, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent

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On February 12, 2003, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows:

• Kingfisher's business address is 1717 Main Street, Ely, MN 55731; its telephone number is (218) 555-2211; and its e-mail address is kingfisher@kf.com.
• The employer identification number is 11-1111111, and the principal business activity code is 451110.
• Nancy owns 50% of the common stock and is president of the company, and Delores owns 50% of the common stock and is vice president of the company.
No other class of stock is authorized.
• Both Nancy and Delores are full-time employees of Kingfisher. Nancy's Social Security number is 123-45-6789, and Delores's Social Security number is 987-65-4321.
• Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Kingfisher uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes.
• During 2015, the corporation distributed cash dividends of $80,000.

Kingfisher’s financial statements for 2015 are shown below.

Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received

Assets Cash Trade notes and accounts receivable Inventories State bonds Federal income tax refund

During 2015, Kingfisher made estimated tax payments of $43,750 each quarter to the IRS. Prepare a Form 1120 for Kingfisher for tax year 2015. Suggested software: H&R BLOCK Tax Software.

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South Western Federal Taxation 2017 Comprehensive

ISBN: 9781305874169

40th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young

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