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Answered: - During 2012, Pet Kingdom made estimated tax payments of $1


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.

2.? On February 12, 2002, 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 num-

ber is (218) 555-2211; and its e-mail address is k..r@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 Secu-

rity 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 2012, the corporation distributed cash dividends of $64,000.

Kingfisher?s financial statements for 2012 are shown below.

Income Statement

Income

Gross sales????????? $1,884,000

Sales returns and allowances??????? (64,000)

Net sales???????????? $1,820,000

Cost of goods sold?????????? (736,000)

Income

Gross profit???????? ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ?????????????? $1,084,000

Dividends received from stock

investments in less-than-20%-owned

U.S. corporations???????????? ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? 9,000

Interest income

State bonds????????????????????????????????????????????????????? $2,500

Certificates of deposit???? ???????????????????????????? ??4,000?? ????????????????????????????????????????????????? ???????????????????????6,500

Total income????? ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ?????????????? $1,099,500

Expenses

Salaries?officers

Nancy Trout??????? ??????????????????????????????????????????? $150,000

Delores Lake?????? ??????????????????????????????????????????? 150,000 $300,000

Salaries?clerical and sales?????????? ??????????????????????????????????????????? ??232,000

Taxes (state, local, and payroll)?? ??????????????????????????????????????????? ????68,000

Repairs and maintenance????????????? ??????????????????????????????????????????? ????45,000

Interest expense:

Business loans??? ??????????????????????????????????????????? $10,000

Loan to purchase state bonds????? ????????????? ?????1,800?????????????? ??? 11,800

Advertising????????? ????????????????????????????????????????????????????????????????????????? ??????5,000

Rental expense???????????????????????????????????????????????????????????????????????????? ??? 38,000

Depreciation*??? ????????????????????????????????????????????????????????? ???????????????????32,000

Charitable contributions ??????????????????????????????????????????????? 12,000

Employee benefit programs????????? ??????????????????????????????????????????? ?????19,000

Premiums on term life insurance policies

on lives of Nancy Trout and Delores

Lake; Kingfisher is the designated

beneficiary????????? ????????????????????????????????????????????????????????????????????????? ?????12,800

Legal and accounting services????? ? ?????????????????????????????????????????? ?????16,000

Total expenses?? ????????? ????????????????????????????????????????????????????????????????????????????????????????????????????????????? ???????????(791,600)

Net income before taxes?????????????? ???????????????????????????????????????????????????????????????????????????????????????? ????????$? 307,900

Federal income tax????????? ??????????????????????????????????????????????????????????????????????????????????????????????????????? ???????????(105,593)

Net income per books???? ????????????? ????????????????????????????????????????????????????????????????????????????????????????? ?????????$? 202,307

* You are not provided enough detailed information to complete a Form 4562 (depreciation). If you solve

this problem using H&R BLOCK At Home, enter the amount of deprecation on line 20 of Form 1120.

Balance Sheet

Assets?? ?????????????????????????????????????????????????????????? January 1, 2012? December 31, 2012

Cash????? ?????????????????????????????????????????????????????????? $384,000???????????? $287,780

Trade notes and accounts receivable??????? 547,000????????????? 668,000

Inventories?????????????????????????????????????????????????????? 480,000????????????? 569,600

State bonds???????? ??????????????????????????????????????????? 60,000?? ?????????????? 60,000

Federal income tax refund?????????????????????????? ?0??????? ?????????????? 2,407

Certificates of deposit???? ???????????????????????????? 80,000?? ????????????? 80,000

Stock investments??????????? ???????????????????????????? 100,000 100,000

Building and other depreciable assets?????? 192,000????????????? 192,000

Accumulated depreciation?????????????????????????? (71,040)????????????? (103,040)

Land????? ?????????????????????????????????????????????????????????? 116,000 116,000

Other assets??????????????????????????????????????????????????? 2,880??? ??????????????? 1,600

Total assets??????? ??????????????????????????????????????????? $1,890,840????????? $1,974,347

Liabilities and Equity???????????????????????????????????? January 1, 2012? December 31, 2012

Accounts payable???????????? ???????????????????????????? $240,000???????????? $220,440

Other current liabilities?? ???????????????????????????? 64,240?? ??????????????? 32,000

Mortgages????????? ??????????????????????????????????????????? 168,000 165,000

Capital stock??????????????????????????????????????????????????? 400,000????????????? 400,000

Retained earnings??????????? ???????????????????????????? 1,018,600??????????? 1,156,907

Total liabilities and equity?????????????????????????? $1,890,840???????? $1,974,347

During 2012, Kingfisher made estimated tax payments of $27,000 each quarter to the

IRS. Prepare a Form 1120 for Kingfisher for tax year 2012. Suggested software: H&R

BLOCK At Home.


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.

 

2. On February 12, 2002, 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 2012, the corporation distributed cash dividends of $64,000.

 

Kingfisher?s financial statements for 2012 are shown below.

 

Income Statement

 

Income

 

Gross sales

 

$1,884,000

 

Sales returns and allowances (64,000)

 

Net sales

 

$1,820,000

 

Cost of goods sold

 

(736,000)

 

Income

 

Gross profit

 

Dividends received from stock

 

investments in less-than-20%-owned

 

U.S. corporations

 

Interest income

 

State bonds

 

$2,500

 

Certificates of deposit

 

4,000

 

Total income

 

Expenses

 

Salaries?officers

 

Nancy Trout

 

Delores Lake

 

Salaries?clerical and sales

 

Taxes (state, local, and payroll)

 

Repairs and maintenance

 

Interest expense:

 


 

$150,000

 

150,000

 


 

$1,084,000

 

9,000

 

6,500

 

$1,099,500

 


 

$300,000

 

232,000

 

68,000

 

45,000

 


 

Business loans

 

$10,000

 

Loan to purchase state bonds

 

1,800

 

11,800

 

Advertising

 

5,000

 

Rental expense

 

38,000

 

Depreciation*

 

32,000

 

Charitable contributions

 

12,000

 

Employee benefit programs

 

19,000

 

Premiums on term life insurance policies

 

on lives of Nancy Trout and Delores

 

Lake; Kingfisher is the designated

 

beneficiary

 

12,800

 

Legal and accounting services

 

16,000

 

Total expenses

 

(791,600)

 

Net income before taxes

 

$ 307,900

 

Federal income tax

 

(105,593)

 

Net income per books

 

$ 202,307

 

* You are not provided enough detailed information to complete a Form 4562 (depreciation). If

 

you solve

 

this problem using H&R BLOCK At Home, enter the amount of deprecation on line 20 of Form

 

1120.

 

Balance Sheet

 

Assets

 

January 1, 2012 December 31, 2012

 

Cash

 

$384,000

 

$287,780

 

Trade notes and accounts receivable 547,000

 

668,000

 

Inventories

 

480,000

 

569,600

 

State bonds

 

60,000

 

60,000

 

Federal income tax refund

 

?0?

 

2,407

 

Certificates of deposit

 

80,000

 

80,000

 

Stock investments

 

100,000

 

100,000

 

Building and other depreciable assets 192,000

 

192,000

 

Accumulated depreciation

 

(71,040)

 

(103,040)

 

Land

 

116,000

 

116,000

 

Other assets

 

2,880

 

1,600

 

Total assets

 

$1,890,840

 

$1,974,347

 

Liabilities and Equity

 

Accounts payable

 

Other current liabilities

 

Mortgages

 

Capital stock

 

Retained earnings

 

Total liabilities and equity

 


 

January 1, 2012 December 31, 2012

 

$240,000

 

$220,440

 

64,240

 

32,000

 

168,000

 

165,000

 

400,000

 

400,000

 

1,018,600

 

1,156,907

 

$1,890,840

 

$1,974,347

 


 

During 2012, Kingfisher made estimated tax payments of $27,000 each quarter to the

 

IRS. Prepare a Form 1120 for Kingfisher for tax year 2012. Suggested software: H&R

 


 

BLOCK At Home.

 


 

 


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