Bottle-Up, Inc. was organized on January 8, 2010. and made its Selection on January 24, 2010. The necessary consents to the election were filed in a timely manner. Its address is 1234 Hill Street, City, ST 33333. Bottle-Up uses the calendar year as its tax year, the accrual method of accounting and the first-in, first-out (FIFO) Inventory method Bottle-Up manufactures ornamental giass bottles. It made no changes to its inventory costing methods this year. It uses the specific identification method for bad debts for book and tax purposes. Herman Hiebert and Melvin Jones own 500 shares each. Both individuals materially participate in Bottle-Up's single activity. Herman Hebert is the tax matters person Financial statements Bottle-Up for the current year are shown in Tables C:11-20 through C:11-40. Prepare a 2019 S corporation tax return for Bottle-Up, showing yourself as the paid preparer Table C:11-2 Bottle-Up, Inc Income Statement for the Year Ended December 31 of the Current Year (Problem C.11-610) Sales $2.500.000 Returns and allowances (15.000 Net sales 52,485.000 Beginning inventory 5 107.000 Purchases 900.000 Labor (W-2 wages) 200.000 Supplies 80 000 Utilities 100.000 Other manufacturing costs 188.000 Goods available for sale $1,570,000 Ending inventory 196 000 1474,000 Gross profit $1,011.000 Salaries $ 451,020 Utilities expense 54.000 Depreciation (MACRS depreciation is $36,3117 11,782 Automobile and truck expense 26.000 Office Supplies expense 9.602 Advertising expense 105,000 Bad debts expense 620 Rent expense 30,000 Interest expense 1,500 12,500 Meals and entertainment expense Selling expernes 108.500 38.000 Repairs and maintenance expense Accounting and legal expense 4,500 Charitable contributions * 9,000 24.500 11,000 36.980 2.500 1.000 1938.000 5 72.996 Insurance expense Hourly employees' fringe benefits Payroll taxes Other taxes Penalties (fines for overweight trucks) Operating profit Other income and losses Long-term pain on sale of capital assets Sec 1231 loss Interest on US Treasury bills Interest on State of Florida bonds Dividers from domestic corporations Investment expenses Net Income $48.666 (1,1001 1.200 600 11,600 1600) 60.366 5 133.362
Officer salaries of $120,000 are included in the total Al are employer's W-2 wages The AMT depreciation adjustment on personal property is 59.000 Investment interest expense is 5500. All other interest expense is trade. or business-related None of the interest ex- pense relates to the production of tax-exempt income dor $12.500 total, $4,000 allocated to meals and $8,500 allocated to entertainment The corporation made all contributions in cash to qualifying charities Includes $3,000 of premiurns pad for policies on lives of corporate officers Bottle-Up is the beneficiary for both policies 9 The corporation acquired the capital assets on March 3, 2017 for $100,000 and sold them on September 15, 2019, for $148,666 The corporation acquired the Sec 1231 property on June 5, 2018 for $10,000 and sold it on December 21, 2019, for $8,900.
Table C:11-3 Bottle-Up, Inc. Balance Sheet for January 1 and December 31 of the Current Year (Problem C:11-616 January 1 December 31 Assets Cash Accounts receivable Inventories Stocks Treasury bills State of Florida bonds Building and equipment Minus: Accumulated depreciation Land Total $ 15,000 41,500 102,000 103,000 15,000 10,000 375,434 (161,318) 160.000 $660,616 3116,948 45,180 96,000 74,000 16,000 10,000 375,000 (173,100) 190.000 $750,028 Liabilities and equities Accounts payable Accrued salaries payable Payroll taxes payable Sales taxes payable Due to Mr. Hiebert Mortgage and notes payable (current maturities) Long-term debt Capital stock Retained earnings Total S 36,000 12,000 3,416 5,200 10,000 44,000 210,000 10,000 330,000 $660,616 $ 10,000 6,000 7,106 6,560 5,000 52,000 260,000 10,000 393,362 $750,028 Table C:11-4 Bottle-Up, Inc. Statement of Change in Retained Earnings, for the Current Year Ended December 31 (Problem C Balance, January 1 $330,000 Plus: Net income $133,362 Minus: Dividends (70,000) 63,362 Balance, December 31 $393,362 The January 1 accumulated adjustments account balance is $274,300
More Jan 24, 2010 Income 3 4 39 Lyo 12 OS From 1120-5 U.S. Income Tax Return for an S Corporation Do not formulerado 2019 in Form 283 to be an Scot For Calendar year 2015 setembre Go to www.in.rs for train and the latest information 2019 30 D "Bottle -up inc XXXXXXXX TYPE OR PRINT 1234 Stree Gede CORSAM C. ST 33333 of the corporation electing to be an corporation beginning with this year? Yes No chrom 2553 not ready thed Check at retum Narne change Address charge Amended return section to recation Enter the number of shareholders who were shareholders during any part of the tax year Check if corporation Aggregated activities for section des atesh purposes. Grouped in for action team vt purpos Caution include only trade or business income and expenses on fines tatou 21. See the moretions for more information 1a Gross receipts of sales 10 2,500 DDD Retums and allowances Tb 1GODO Balance Subtract line 1b from line la 10 2.499 DDD Cost of goods sold attach Form 1125-A 2 1.274,000 Gross profit. Subtract line 2 from line 1 3 1.190.000 4 Net gain foss) from Form 4797 line 17 (attach Form 4797) 5 5 Other income fosse instructions-attach statement 6 6 Total income foss). Add lines through 5 LO012 7 7 Compensation of officers (see instructions-attach Form 1125-E) 8 Salaries and wages (less employment credits 457.020 9 9 Repairs and maintenance 27 OOD 10 10 Bad debts 20 11 Rents 20DDD Taxes and licenses 12 13 Interest (see instructions) 13 14 14 Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 15 15 Depletion (Do not deduct oil and gas depletion) 16 Advertising 16 17 Pension profit-sharing, etc., plans 17 18 Employee benefit programs 18 19 Other deductions (attach statement) 19 20 Total deductions. Add lines 7 through 19 20 21 Ordinary business income foss). Subtract line 20 from line 6 21 22a Excess net passive income or LIFO recapture tax (see instructions) 22a b Tax from Schedule D (Form 1120-S) 22b Add lines 22a and 22b (see instructions for additional taxes) 22c 23a 2019 estimated tax payments and 2018 overpayment credited to 2019 23a b Tax deposited with Form 7004 23b Credit for federal tax paid on fuels (attach Form 4136) 23c d Reserved for future uso 23d Add lines 23a through 23d 23e 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached 24 25 Amount owed. If line 23e is smaller than the total of lines 220 and 24, enter amount owed 26 Overpayment. I line 23e is larger than the total of lines 220 and 24, enter amount overpaid 26 27 Enter amount from line 26: Credited to 2020 estimated tax Refunded Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and Sign belief, it is true, correct, and complete. Declaration of prepare fother than payer) is based on all information of which preparer has any nonledge May the RSG this return ere with the prepare shown below Signature of officer Date Title See instructions. Yes No Print Type preparer's name aid Preparer's signature Date Check OPTIN employed eparer Firm's name Firm's EIN Ee Only Firm's address Phone no Paperwork Reduction Act Notice, see separate instructions. Cat No. 11510H Form 1120-S 2016 Deductions see instructions for inition c c Tax and Payments