4 . 12 M DHE 6/20/2022 . 1 2 3 T Q W E R Can lock A S D F 5 Z X C Tax Return Project Accounting 5413-Summer 2022 Requirements Read and analyze the case facts. This is an individual effort, NOT a group effort Complete the following forms for the 2020 tax year 1120 (all six pages 1125-A Schedule D (form 1120), 4562, 8824. You need not complete Schedule M-3, or any other forms not specifically listed above. This is an individual effort, NOT a group effort Forms and their instructions can be downloaded from the IRS website at https://www.irs.govforma-instructions IMPORTANT: Please ensure that you get 2929 forms CRITICAL: Do NOT complete the forms in your browser. Download them, save to your computer, and then open using Adobe Acrobat. If you try to complete in your browser, they will not save properly and you could lose all of your work. You must upload your completed forms to Blackboant prior to the beginning of class on December 6, 2021. You should also bring to class a copy of your completed forms for reference. During class, you will work in small groups to complete a set of tax forms for Manatee Corporation. Your group will tum in the group forms at the end of class. You wil be graded on your group's efforts in addition to your individual grade Case Facts Manatee Corporation prepared the attached 2020 balance sheet and income statement in accordance with generally accepted accounting principles. In addition, the following information is available that might impact the calculation of 2020 taxable income 2 During June of 2020, Manatee acquired new equipment with a total cost of $270,000 This equipment is considered seven-year property under MACRS and is not listed property Tax depreciation on the remainder of Manatee's fixed assets (those acquired before 2020), computed under MACRS, totals $144,000. When Manatee was formed five years ago, it inoured $37,000 of organization costs. For book purposes, these costs were expensed five years ago when incurred. For tax purposes, Manatee deducted $5,000 of the costs in the year of formation. The remainder is being amortized for tax purposes over 180 months Sign Here mpiron 7500 1 BE 3 Dividend income on the income statement is from investments in several stocks Manatee owns less than 1% of the outstanding stock of any investee corporation. 4 Book bad debt expense was computed using the allowance method. Actual write-offs of uncollectible accounts during 2020 totaled $26,000. Manatee's income statement reflects a $52,000 gain on an exchange of land. In November 2020, Manatee transferred $30,000 cash and investment land with a FMV of Paid Preparar Use Only Cash Assets Manatee Corporation Balance sheet as of December 31, 2019 and 2020 2019 2020 Accounts receivable $ 63,530 86,595 $ 87,094 Less: allowance for bad debts 137,800 (11,820) (18,820) Merchandise inventory 173,823 140,450 Investment assets 85,000 81,000 Land 348,000 430,000 Buildings and equipment 572,286 842,286 Less: accumulated depreciation (121,188) (220,188) Other assets 44,926 45.420 Total Assets $1.241.152 $1.525.042 Liabilities and Equity pice 7500 2nd Current portion of long-term debt Other current liabilities (unearned rent) Common stock Accounts payable $ 248,323 $ 284,363 1,500 11,500 21,000 28,500 Long-term payables 435,170 376,170 28,000 28,000 50,000 50,000 Preferred stock Additional paid-in capital 98,000 98,000 Retained earnings (unappropriated) 359.159 648,509 Total Liabilities and Equity $1.241.152 $1.525.042 EP 5 Manatee Corporation Statement of Income for the year ended December 31, 2020 Sales revenue Dividend income Rental income Municipal bond interest income Gain on land exchange Loss on sale of investments Cost of goods sold 4,000 52,000 (14,000) (761,000) $1,923,000 1 num 6,500 lack 47,650 7 Depreciation expense (99,000) Interest expense (6,200) Officers salaries: (150,500) Salaries and wages paid to sales and administrative personnel i (182,000) Employee benefits (46,000) Bad debt expense (33,000) 1 Property taxes (19,600) Charitable contributions (4,000) Premiums on key-man life insurance Business meals and entertainment (8,700) (17,400) 0 (11,000) Lobbying costs Repairs and maintenance Income before taxes on 7500 21 Other administrative costs Income tax expense (federal and state) (182.000) $439.350 Net income (37,900) (21.500) 6213501 CE 8 5 2 4 6. $400,000 and a book and tax basis of $348,000 to an unrelated corporation in exchange for other investment land with a FMV of $430,000. For tax purposes, this exchange Qualifies as a ko-kind exchange under Sec 1001 Manatee's income statement reflects total loss on investment assets of $14,000 Detailed information for the assets producing this loss is as follows Stock Date Acquired 150 shares Clay Corp 100 shares Gold inc 7/2/18 4/2/16 7 L CE t 7 8 9 leck Cost Date Sold $5,000 4/1/20 12,000 11/6/20 Sales Proceeds $2.500 500 9 10 11. 22 14. Manatee has rented out unused space in its office building to several tenants. Rental income from this activity is reported on its income statement. Several tenants pay rent in advance-see items 8 and 9 below related to the uneamed rental income Manatee's beginning balance sheet reflects a liability for uneamed rental income totaling $21,000. This liability reflects cash collected from tenants late in 2019, related to rental periods in 2020. This income was reported on Manatee's 2019 tax return. When the rental period occurs in 2020, Manatee recorded book income for this amount Manatee's ending balance sheet reflects a liability for unearned rental income totaling $28,500 This liability reflects cash collected from tenants late in 2020 for which the rental period occurs in 2021. Manatee's income statement reflects book income tax expense of $182,000. Of this amount, $135,000 is book federal income tax expense, and the remainder is state income tax expense Manatee's income statement reports business meals and entertainment costs of $17,400. Of this amount, $8,000 is entertainment and the remainder relates to business meals Manatee paid federal estimated tax payments totaling $175,000 Included in 'other administrative costs' on Manatee's income statement are $2,050 in fines paid to the local government for parking violations Manatee paid $150,000 of dividends to its shareholders during 2020. The corporation has earnings and profits greater than the current dividend distributions 15 16. Manatee's inventory is purchased for resale, and valued at cost. The rules of Sec. 263A do not apply to Manatee in valuing its inventory Manatee's employer ID number is 98-7654321 4 S 9 1 2 3 0 NVIDIA . 12 H 1 2 3 Q W E R Geslock A S D F 5 2 X C DHE 6/20/2022 Tax Return Project Accounting 5413-Summer 2022 Requirements 1 Read and analyze the case facts This is an individual effort, NOT a group effort Complete the following forms for the 2020 tax year 1120 (all six pages 1125-A Schedule D (form 1120), 4562, 8824. You need not complete Schedule M-3, or any other forms not specifically listed above. This is an individual effort, NOT a group effort Forms and their instructions can be downloaded from the IRS website at https://www.irs.govforma-instructions IMPORTANT: Please ensure that you get 2929 forms CRITICAL: Do NOT complete the forms in your browser. Download them, save to your computer, and then open using Adobe Acrobat. If you try to complete in your browser, they will not save properly and you could lose all of your work. You must upload your completed forms to Blackboant prior to the beginning of class on December 6, 2021. You should also bring to class a copy of your completed forms for reference. During class, you will work in small groups to complete a set of tax forms for Manatee Corporation. Your group will tum in the group forms at the end of class. You will be graded on your group's efforts in addition to your individual grade Case Facts Manatee Corporation prepared the attached 2020 balance sheet and income statement in accordance with generally accepted accounting principles. In addition, the following information is available that might impact the calculation of 2020 taxable income 2 3. 4 5. During June of 2020, Manatee acquired new equipment with a total cost of $270,000 This equipment is considered seven-year property under MACRS and is not listed property Tax depreciation on the remainder of Manatee's fixed assets (those acquired before 2020), computed under MACRS, totals $144,000 When Manatee was formed five years ago, it incured $37,000 of organization costs. For book purposes, these costs were expensed five years ago when incurred. For tax purposes, Manatee deducted $5,000 of the costs in the year of formation. The remainder is being amortized for tax purposes over 180 months Dividend income on the income statement is from investments in several stocks Manatee owns less than 1% of the outstanding stock of any investee corporation. Book bad debt expense was computed using the allowance method. Actual write-offs of uncollectible accounts during 2020 totaled $26,000. Manatee's income statement reflects a $52,000 gain on an exchange of land. In November 2020, Manatee transferred $30,000 cash and investment land with a FMV of Sign Here Paid Preparer Use Only mpion 7900 1