Tax Return Problem---Form 1120

PREPARE FORM 1120 FOR CREATIVE KITCHENS

Creative Kitchens of 1400 Main Street, Dayton, Ohio, was formed on January 2,1976, Kitchens is in the buiness of retailing custom kitchens cabinets and accessories. The corporation's business code is 442299 and its employer identification number is 86-0806200.

Stock ownership and officer compensation are as follows:

R. Gee #347-54-1212 50% 60,000

E. Gee #379-12-5447 25% 20,000,

G. Gee #406-23-4567 25% 20,000.

R. Gee devotes 100% of his timeto the buines; E. Gee and G. Gee together devotes 50% of their time to the business. The coporation made cash distributions of $30,000 on March 1, 2014 and 20,000 on September 13, 2004. The distributions were made in proportion to stockholdings.

The corporation's only asset transaction involved the purchase of additional office equipment at a cost of 10,000. Estimated tax payments of $750 each were made on April 12, June 13, and December 13.

Additional Data Includes:

Sales$438,262Repairs$800

Sales Returns$ 20,000Bad Debt$ 2,000

Purchases205,000Rents15,000

Dividends1,000Taxes8,000

Interest-City ofContributions1,400

Chicago bonds 1,500Depreciation- from

Wages30,000Form 456220,000

Advertising18,000

Financial Balance SheetBeginning of yearEnd of year

Cash11,2005,700

Accounts Recievable65,00053,062

Inventories40,00045,000

Investments 10,000 10,000

Depreciable assets150,000160,000

Accumulated depreciation(20,000)(40,000)

Accounts Payable30,00035,000

Capital Stock150,000150,000

Retain Earnings-

Inappropriated76,200