2019 Form 1120 Page one and Schedule L

Chad Feldheimer and Walter Sobchak have seen business boom with their Fresh Threads clothing line. Their success was so great that they decided they should create a new entity to branch out from their original business to sell other gym and bowling related items and open stores to sell their products. They incorporated their entity to form Fresh Threads, Inc. in 2018 and the business has been doing well. For the tax year 2019 Fresh Threads provided the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Balance Sheet Assets: 1/1/2019 Cash $380,000 Trade notes and accounts receivable 308,400 Inventories 900,000 State bonds 160,000 Federal income tax refund 0 Certificates of deposit 140,000 Stock investments 300,000 Building and other depreciable assets 240,000 Accumulated depreciation (88,000) Land 20,000 Other assets 3.600 Total assets $2,363,200 12/31/2019 $337,300 480, 280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128, 800) 20,000 2,000 $2,564,100 Income Statement Income: Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends from stock in less than 20% owned US corps. Interest income State bonds $14,000 Certificates of deposit $10.000 Total income $2,408,000 (80,000) $2,328,000 (920,000) $1,408,000 12,000 Liabilities and Equity: Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity 1/1/2019 $300,000 80,300 210,000 500,000 1,272,900 $2,363,200 12/31/2019 $233,880 40,000 200,000 500,000 1,590, 220 $2,564,100 24,000 $ 1,444,000 During 2019, Fresh Threads made estimated tax payments of $27,000 each quarter to the IRS. Prepare a 2019 Form 1120 computing the corporation's income or loss. 2019 Form 1120 320,000 290,000 85,000 56,000 Page 1 Schedule L Expenses: Salaries - officers: Chad Eeldheimer $160,000 Walter Sobchak 160,000 Salaries - clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense Business loans $12,000 Loan to buy state bonds 8,000 Advertising Rental expense Depreciation (No f4562 necessary, enter on Line 20 of f1120) Charitable contributions Employee benefit programs Premiums on term life insurance for key personnel Total expenses Net income before taxes Federal income tax 20,000 6,000 68,000 40.000 15,000 24,000 16,000 (940,000) 504,000 (106,680) Chad Feldheimer and Walter Sobchak have seen business boom with their Fresh Threads clothing line. Their success was so great that they decided they should create a new entity to branch out from their original business to sell other gym and bowling related items and open stores to sell their products. They incorporated their entity to form Fresh Threads, Inc. in 2018 and the business has been doing well. For the tax year 2019 Fresh Threads provided the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities: Balance Sheet Assets: 1/1/2019 Cash $380,000 Trade notes and accounts receivable 308,400 Inventories 900,000 State bonds 160,000 Federal income tax refund 0 Certificates of deposit 140,000 Stock investments 300,000 Building and other depreciable assets 240,000 Accumulated depreciation (88,000) Land 20,000 Other assets 3.600 Total assets $2,363,200 12/31/2019 $337,300 480, 280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128, 800) 20,000 2,000 $2,564,100 Income Statement Income: Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends from stock in less than 20% owned US corps. Interest income State bonds $14,000 Certificates of deposit $10.000 Total income $2,408,000 (80,000) $2,328,000 (920,000) $1,408,000 12,000 Liabilities and Equity: Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity 1/1/2019 $300,000 80,300 210,000 500,000 1,272,900 $2,363,200 12/31/2019 $233,880 40,000 200,000 500,000 1,590, 220 $2,564,100 24,000 $ 1,444,000 During 2019, Fresh Threads made estimated tax payments of $27,000 each quarter to the IRS. Prepare a 2019 Form 1120 computing the corporation's income or loss. 2019 Form 1120 320,000 290,000 85,000 56,000 Page 1 Schedule L Expenses: Salaries - officers: Chad Eeldheimer $160,000 Walter Sobchak 160,000 Salaries - clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense Business loans $12,000 Loan to buy state bonds 8,000 Advertising Rental expense Depreciation (No f4562 necessary, enter on Line 20 of f1120) Charitable contributions Employee benefit programs Premiums on term life insurance for key personnel Total expenses Net income before taxes Federal income tax 20,000 6,000 68,000 40.000 15,000 24,000 16,000 (940,000) 504,000 (106,680)