On November 1, 2005, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows: Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225;
On November 1, 2005, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows:
â€¢ Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is firstname.lastname@example.org.
â€¢ The employer identification number is 11-1111111, and the principal business activity code is 453910.
â€¢ Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized.
â€¢ Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6789, and Kim's Social Security number is 987-65-4321.
â€¢ Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.
â€¢ During 2012, the corporation distributed cash dividends of $300,000.
Pet Kingdom's financial statements for 2012 are shown below.
During 2012, Pet Kingdom made estimated tax payments of $107,000 each quarter to the IRS. Prepare a Form 1120 for Pet Kingdom for tax year 2012. Suggested software: H&R BLOCK At Home.Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Income Statement Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross proft Dividends received from stock 6,900,000 (240,000) $6,660,000 (2,760,000) $ 3,900,000 investments in less-than-20% owned U.S. corporations 52,500 Interest income: State bonds Certificates of deposit 18,000 24,000 42,000 $ 3,994,500 Total income Expenses Salaries-officers 315,000 315,000 Janet Morton Kim Wong Salaries-clerical and sales Taxes (state, local, and payroll Repairs and maintenance Interest expense: $630,000 870,000 285,000 168,000 Loan to purchase state bonds Other business loans 10,500 261,000 271,500 Advertising Rental expense Depreciation* Charitable contributions Employee benefit programs Premiums on term life insurance 69,000 129,000 120,000 45,000 72,000 policies on lives of Janet Morton and Kim Wong: Pet Kingdom is the 48,000 designated beneficiary Total expenses Net income before taxes Federal income tax Net income per books (2,707,500) 1,287,000 (423,555) $863,445 Balance Sheet Assets January 1, 2012 December 31, 2012 1,056,000 1,815,000 3,300,000 990,000 330,000 385,000 Trade notes and accounts receivable Inventories Stock investment State bonds Certificates of deposit Prepaid Federal tax Buildings and other depreciable assets Accumulated depreciation $748,000 2,021,000 3,636,000 990,000 330,000 385,000 4,445 4,805,000 (847,000) 715,000 113,000 $12,900,445 4,805,000 (727,000) 715,000 123,000 Other assets Total assets 12,792,000 Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings January 1,2012 2,035,000 213,000 4,550,000 3,000,000 2,994,000 December 31, 2012 1,837,000 184,000 4,322,000 3,000,000 3,557,445 12,900,445 Total liabilities and equity 12,792,000
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Pet Kingdom Corporate Tax Return Form 1120 Department of the Treasury Internal Revenue Service A Check if 1a Consolidated return attach Form 851 b Lifenonlife consoli dated return Personal holding co …View the full answer
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