Barbara "Barbie" Roberts started a personal shopping company, Barbie's Closet. It operates on a calendar year end. It began business on January 1, 2021. Barbara needs you to do the following: Prepare the 2021 Corporate Tax Return (Be sure to attach any schedules required. Ignore penalties. State return is not required.) Prepare a letter to Barbara Roberts: o Explaining the advantages/disadvantages of Barbara's chosen type of entity o Explaining the results of her tax returns - corporate Financial and tax advise Prepare a presentation, including PowerPoint, citing the main points in your letter and returns for presentation to Barbara in a client meeting. Remember she is not an accountant, so she is not familiar with accounting terminology. The presentation should be designed as though you are in a meeting with Barbara and presenting the material to her. Please use the "Video Assignment" in D2L to present your video presentation. Note: the PowerPoint does not have to be shown in the video, but it is allowed. Barbie's Closet, Inc. Barbie's Closet, Inc. Fed ID # 57-5555555 Address: 1000 Mattel Blvd Charleston, SC 29406 Cash basis of accounting is used The business is a personal service corporation Barbara contributed $30,000 to the corporation at formation and took a distribution of $10,000 on December 31st Barbie's Closet did not make any estimated tax payments for the 2021 tax year. Barbara Roberts 100% Owner o Social Security #: 555-55-5550 Address: 111 Malibu Blvd. Charleston, SC 29406 o Compensation to Officer: Wages of $90,000 Barbie's Closet Balance Sheet December 31, 2021 Assets Liabilities and Equity 13,100 Federal Tax Liability 4,820 200 Long Term Liabilities 55,000 10,000 Capital Stock 30,000 100,000 Retained Earnings 13,480 -20,000 Total Liabilities and Equity 103,300 103,300 Cash Supplies Investments Property Plant and Equipment Accumulated Depreciation Total Assets Income: Barbie's Closet Income Statement For the year ended December 31, 2021 Service Revenue 250,000 Dividend Income 1,000 Interest Income. 200 Tax Exempt Interest 100 Total Income 251,300 Expenses: Expenses: Advertising Expense Charitable Contributions 2,500 500 Compensation Barbie 90,000 Depreciation Expense 20,000 " Interest Expense 1,500 Insurance Expense 2,500 Office Expense 500 Professional Services 500 Meals 500 Supplies Expense 4,000 Payroll Taxes- Barbara 7,500 Payroll Taxes Other 5,000 Rent Expense 24,000 Salaries and Wages 60,000 Utilities 4,000 223,000 Total Expenses Income before Income Tax 28,300 Income Tax Expense 4,820 23,480 Net Income Dividends were received from a less than 20% owned corporation. Depreciation for tax purposes is 25,000. Form 4562 not required. Distributions from Barbie's Closet 10,000 W L3 $ CORRECTED (if checked) PAYER'S name, street address, city or town, etate or province, country, ZIP 1a Total ordinary dividends or foreign postal coda, and tokphone no. Mattel, Inc. 333 Continental Boulevard. El Segundo, CA 90245-5012 OMB No. 1545-0110 Form 1099-DIV Dividends and Distributions $ 1,000 1b Qualified dividonds 2a Tobal capital gan diatr. 20 Urecap. Sec. 1250 guin $ $ Copy B For Recipient PAYER'S fodora idontication number RECIPIENT'S kdomBcation number 2c Section 1202 gan 2d Colectia p 57-1234567 57-5555555 $ RECIPIENTS nam Barbie's Closet red adds includ 1000 Mattel Blvd. City or town, state or province, country, and 2 or foreign postal cods Charleston, SC 29406 3 Nondivided dributors 4 Federal income tax withheld $ $ 5 Investment expenses $ 6 Forgn tax paid 7 Foreign courty or US posson $ & Cash Budation distributions 9 Noncash dation distribution $ $ FATCA ng 101 compl-andere chicersh 11 Spec requirement Account number pa Instructions Form 1099-DIV (keep for your records) This is important t information and a boing furnished to the Inderal Fevenue Service renam, a negligence penalty or other sanction may be imposed on you f Pince in taxate and the that has not boon reported dela bond andereal dvalands $ $ 12 State 13 am 14 State tax withheld $ $ www.ra.gov/lonn1099 Department of the Tresaury-Intern Hever Service CORRECTED (if checked) PAYER'S name, street addres, city or town, state or province, country, ZIP Payer's RTN (optional) or foreign postal code, and telephone no. OMB No. 1545-0112 Malibu Investments, Inc. 123 Rodeo Drive Los Angelas, CA 99999- 1 interest income Interest Income 200 Form 1099-INT 2 Early withdrawal peally PAYER'S federal identification number RECIPIENTS identification number $ Copy B For Recipient 3 interest on U.S. Savings Bonds and Troas obligations: 57-6666666 57-5555555 $ RECIPIENT'S name 4 Fodoral income tax withhold 5 investment exponses Barbie's Closel 6 Foreign tax pald 7 Fondign country or US possession Street address including at. no $ a Tax-exempt inton 9 fleecet private adduty bond 1000 MaLLe Blvd. Cly or town, state or province, country, and P or funign postal code $ 100 $ 10 Markel dacount 11 Bond premium Charleston, SC 29406 FATCA fing$ 12 $ 13 Bond pm on wet band This is important taxi information and is being fumished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it h not been reported. Account number (see instructions 1000-INT mes free 14 Tavexempt and tax cred bond CUP no $ 15 State 10 State identification no 17 State tax withheld a Employee's social security number b Employer identification number (EIN) 57-5555555 c Employer's name, address, and ZIP code Barbie Closet 1000 Mattel Blvd. Charleston, SC 29106 d Control number o Employoo's first name and initial Barbara Roberts The information is being Arnished to the Internal Service If you OMB No. 1545 0008 ired to es tace retum, a negligence penalty or other sanction may be imprad on you if this income state and you fail to mport i 1 Wag tips, other compon 2 Federal income tax withheld 90,000 3 Social security weges 90,000 5 Medicare wages and tips 90,000 7 Social security tips 9 18,000 4 Social security tax withheld 5,580 6 Medicare tax withhold 1,305 8 Alcald 10 Dependent care benefits Last namo Su 11 Nonqualified plans 12a Soo Instructions for box 12 13 y 125 111 Malibu Blvd. Char Leaton, SC 29406 14 Other 120 120 1 Employs and code 16 Employer's etate ID number 16 tate wages p SC 2520000-1 90,000 17 Gate Income tax 18 Local wages, ps, et 8,000 19 Local income tax 20 Locatyan Form W-2 Wage and Tax Statement Capy C-For EMPLOYEE'S RECORDS (See Notice to Employee on the back of Copy B.) Departmed of the Feasury-Penal Havens Sale, accurate, FASTI Use e-file A Selection effective date Name TYPE B Business activity code number (see instructions) Number, street, and room or suite no. If a P.O. box, soe instructions. OR PRINT City or town, state or province, country, and ZIP or foreign postal code Form 1120-S Department of the Treasury Internal Revenue Service U.S. Income Tax Return for an S Corporation Do not file this form unless the corporation has filed or is attaching Form 2553 to elect to be an S corporation. Go to www.irs.gov/Form1120S for instructions and the latest information. 2021, ending For calendar year 2021 or tax year beginning OMB No. 1545-0123 2021 20 D Employer identification number E Date incorporated F Total assets (see instructions) C. Check if Sch. M-3 attached G Is the corporation electing to be an S corporation beginning with this tax year? See instructions. Yes No H I Check if: (1) Final return (2) Name change (3) Address change (4) Amended return (5) Enter the number of shareholders who were shareholders during any part of the tax yoar Selection termination J Check if corporation: (1) Aggregated activities for section 465 at-risk purposes (2) Grouped activities for section 469 passive activity purposes Caution: Include only trade or business income and expenses on lines 1a through 21. See the instructions for more information. fa Gross receipts or sales 1a b Returns and allowances i 1b c Balance. Subtract line 1b from lino 1a Income 2 Cost of goods sold (attach Form 1125-A) 3 Gross profit. Subtract lino 2 from line 10 4 Net gain (loss) from Form 4797, line 17 (attach Form 4797) 5 Other income (loss) (soo instructions-attach statomont) 6 Total income (loss). Add linos 3 through 5 7 Compensation of officers (soo instructions-attach Form 1125-E) Salarios and wages (less employmont credits) 1c 2 3 4 5 6 7 B Deductions (See Tax and Payments 14 Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 15 Depletion (Do not deduct oil and gas depletion.) 16 Advertising 17 Pension, profit-sharing, etc., plans 18 19 20 21 Employee benefit programs Other deductions (attach statement) Total deductions. Add lines 7 through 19 Ordinary business income (loss). Subtract line 20 from line 6 22a Excess net passive income or LIFO recapture tax (see instructions). b Tax from Schedule D (Form 1120-S) c Add lines 22a and 22b (see instructions for additional taxes) 23a 2021 estimated tax payments and 2020 overpayment credited to 2021 b Tax deposited with Form 7004 24 25 2222 c Credit for federal tax paid on fuels (attach Form 4136) d Add lines 23a through 23c 14 15 16 17 18 19 20 21 22a 22b 22c 23a 23b 23c 23d 24 25 26 27 Estimated tax penalty (see instructions). Check if Form 2220 is attached Amount owed. If line 23d is smaller than the total of lines 22c and 24, enter amount owed Overpayment. If line 23d is larger than the total of lines 220 and 24, enter amount overpaid Entor amount from line 26: Credited to 2022 estimated tax Under penalties of perjury, I declare that I have examined this retum, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge 26 27 Sign Here Print/Type preparer's name Paid Preparer Firm's name Use Only Firm's address Signature of officer Date Title Preparer's signature Date For Paperwork Reduction Act Notice, see separate instructions. Refunded M May the IRS discuss this return with the preparer shown below? See instructions Yes No Check if self-employed Firm's EIN PTIN Phone no Cat. No. 11510H Form 1120-S co21) 1 Schedule K Shareholders' Pro Rata Share Items Ordinary business income (loss) (page 1, lino 21). 1 2 Not rental real estate income (loss) (attach Form 8825) 2 3a Other gross rental income (loss) 3a b Expenses from other rental activitios (attach statement) 3b c Other net rontal income (loss), Subtract line 3b from line 3a 3c Income (Loss) 4 Interest income 4 5 Dividends: a Ordinary dividends b Qualified dividends. Sb 6 6 Royalties 7 Not short-term capital gain (loss) (attach Schedulo D (Form 1120-S) Ba Net long-term capital gain (loss) (attach Schedule D (Form 1120-S) 7 8a b Collectibles (28%) gain (loss). Bb c Unrecaptured section 1250 gain (attach statement) 8c 9 Net section 1231 gain (loss) (attach Form 4797) 9 10 Other income (loss) (see instructions) 10 11 Section 179 doduction (attach Form 4562) 11 Deductions 12a Charitable contributions b Investment interest expense 12a 12b c Section 59(e)(2) expenditures d Other deductions (soe instructions) Type 1 12c 12d 15a Low-income housing credit (section 425) 13a b Low-income housing credit (other) 13b Credits c Qualified rehabilitation expenditures (rental roal estate) (attach Form 3468, if applicable) 13c d Other rental real estate credits (see instructions) Typo 0 Other rontal credas (see instructions) 13d 130 f Biofuel producer credit (attach Form 6478) 131 g Other credits (toe instructions) Type> Total amount 13g 3:45 Items Affecting Alternative Minimum Tax (AMT) Hems International Transactions Credits Deduction 12a 12a Charitable contributions b Investment interest expense 12b c Section 59(0)(2) expenditures d Other deductions (soo instructions) Type I Type 12c 12d 13a 13a Low-income housing credit (section 4205) 13b b Low-income housing credit (other) c Qualified rehabilitation expendituros (rontal real estate) (attach Form 3468, if applicable) d Other rental real estate credits (see instructions) Type 13c 13d e Other rental credits (see instructions) Type 130 f Biofuel producer credit (attach Form 6478) 131 g Other credits (see instructions), 13g 14 Attach Schedule K-2 (Form 1120-5), Shareholders' Pro Rata Share Roms-International, and check this box to indicate you are reporting items of international tax relevance 15a Post-1986 depreciation adjustment b Adjusted gain or loss c Depletion (other than oil and gas) d Oil, gas, and geothermal properties-gross income O, gas, and geothermal properties-deductions. t Other AMT itoms (attach statomont) 1Ca Tax-oxompt interest income b Other tax-exempt income c Nondeductible expenses d Distributions (attach statement if required) (see instructions) e Repayment of loans from shareholders Foreign taxes paid or accrued 15a 15b 15c 15d 150 15 16a 16b 16c 16d 160 16 Form 1120-S (2021) Form 1120-5 (2021) Schedule K Recon- Other Information liation Shareholders' Pro Rata Share Items (continued) 17a Investment income. 18 b Investment expenses c Dividend distributions paid from accumulated earnings and profits d Other items and amounts (attach statement) Schedule L 1 Cash Income (loss) reconciliation. Combine the amounts on lines 1 through 10 in the far right column. From the rosult, subtract the sum of the amounts on lines 11 through 12d and 16 Beginning of tax year Balance Sheets per Books Assets 2a Trade notes and accounts receivable b Less allowance for bad debts. Inventories U.S. government obligations Tax-exempt securities (soo instructions) 3 4 5 7 0 Mortgage and real estate loans 9 Other investments (attach statement) Other current assots (attach statement). Loans to shareholders. 10s Buildings and other depreciable assets b Loss accumulated depreciation 11a Depletable assets 12 b. Less accumulated depletion Land (not of any amortization). 13a Intangible assets (amortizable only) b Less accumulated amortization Page Total amount 170 17b 17c 18 End of tax year 8 9 Mortgage and real estate loans Other investments (attach statement) 10a Buildings and other depreciable assets b Less accumulated depreciation 11a Depletable assets 12 b Less accumulated depletion Land (not of any amortization). 13a Intangible assets (amortizable only) 14 15 b 16 17 18 19 20 21. 22 23 24 25 26 27 Less accumulated amortization Other assets (attach statement) Total assets Liabilities and Shareholders' Equity Accounts payable. Mortgages, notes, bonds payable in less than 1 year Other current liabilities (attach statement) Loans from shareholders. Mortgages, notes, bonds payable in 1 year or more Other liabilities (attach statement) Capital stock Additional paid-in capital Retained earnings Adjustments to shareholders' equity (attach statement) Loss cost of treasury stock Total liabilities and shareholders' equity Form 1120-S (2021) Form 1120-S (2021) Schedule M-1 Reconciliation of Income (Loss) per Books With Income (Loss) per Return Note: The corporation may be required to file Schedule M-3. See instructions. Not income (loss) per books 1 2 Income included on Schedule K, linos 1, 2, 3c, 4, 5a, 6, 7, 8a, 9, and 10, not recorded on books this year (tomize) Expenses recorded on books this yoar 5 6 3 not included on Schedule K, lines 1 through 12 and 16f (tomize): Income recorded on books this year not included on Schedule K, linos 1 through 10 (itemize): a Tax-exempt interest $ Deductions included on Schedule K, linos 1 through 12 and 161, not charged against book income this year (itemize a Depreciation $ Page 4 a Depreciation $ b Travel and entertainment $ Add lines 1 through 3 Schedule M-2 7 Add lines 5 and 6. 8 Income (loss) (Schedule K line 18). Subtract line 7 from line 4 Analysis of Accumulated Adjustments Account, Shareholders' Undistributed Taxable Income Previously Taxed, Accumulated Earnings and Profits, and Other Adjustments Account (see instructions) (a) Accumulated adjustments account Shandholders undistributed taxable ncome previously taxed (c) Accumulated eamings and profts (d) Other adjustments account 1 Balance at beginning of tax yoar 2 Ordinary income from page 1, bne 21) 3 Other additions 4 Loss from page 1, 21 S Other roductions 4 Add lines 1 through 3 Schedule M-2 8 Income (loss) (Schedule K, line 18). Subtract line 7 from line 4 Analysis of Accumulated Adjustments Account, Shareholders' Undistributed Taxable Income Previously Taxed, Accumulated Earnings and Profits, and Other Adjustments Account (see instructions) (a) Accumulated adjustments account (b) Shareholders undistributed taxable income previously taxed (c) Accumulated earnings and profits (d) Other adjustments account 1 Balance at beginning of tax year 2 Ordinary income from page 1, line 21 3 Other additions 4 Loss from page 1, line 21 5 Other reductions. 6 Combine lines 1 through 5. 7 8 Distributions Balance at end of tax year. Subtract lino 7 from line 6 Form 1120-S (2021)