1. Olive Corporation was formed and began operations on January 1, 2010. The corporation’s income statement for the year and the balance sheet at year-end are presented below.

The corporation made estimated tax payments of $4,000 and the corporation’s federal income tax expense is equal to the federal tax liability. Complete Form 1120 for Olive Corporation on pages 11-35 through 11-39. Do not complete Schedule G.
Schedule UTP is not required.

Transcribed Image Text:

The Olive Corporation Income Statement for the Year Ended December 31, 2010 Gross income from operations Qualified dividends received from a 10 percent owned domestic corporation Total gross income Cost of goods sold Total income Other expenses: $ 260,000 20,000 $ 280,000 (105,000) $ 175,000 Compensation of officers $75,000 Salaries and wages 30,000 Bad debts (direct charge-offs) 7,000 Repairs 3,000 Depreciation 10,000 Advertising 5,000 Payroll taxes 10,000 Total other expenses Net income (before federal income tax expense) The Olive Corporation Balance Sheet as of December 31, 2010 (140,000) $ 35,000 Assets: Cash $ 30,000 Accounts receivable 20,000 Inventory (at cost) 80,000 Equipment 90,000 Less: accumulated depreciation (10,000) Total assets $210,000