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Can someone help? can't get correct net income or balance the year end balance sheet. Corporation (Form 1120) Spring 2017 Michael Fox, Rachel Allen, and
Can someone help? can't get correct net income or balance the year end balance sheet.
Corporation (Form 1120) Spring 2017 Michael Fox, Rachel Allen, and Hannah Rowland are owners in \"FAR, Inc.\" - a corporation engaged in commercial office design services. Pertinent information regarding FAR, Inc. is summarized below. Social security numbers are as follows; Michael - 623-98-0123; Rachel - 410-63-4297; and Hannah - 855-21-1750. Michael is the President of the company. The address of the company is 2835 Lake View Drive, Charlotte, NC 28130. The company was formed and began operations on January 1, 2012. The business code is 541400. The federal identification number is 67-1234598 The corporation uses the cash method of accounting and the calendar year for reporting. The corporation purchased a new office computer system on December 12, 2016. They desire to expense this asset under 179 for tax purposes. The company uses straight-line depreciation for financial reporting and recorded a total of $9,002 depreciation for book purposes (which includes depreciation on the new computer system). The company uses MACRS for its machinery and equipment and recorded $14,602 in depreciation for its other fixed assets (using MACRS). Assume none of the depreciation creates a tax preference or adjustment for AMT purposes. All loan borrowings were used exclusively for acquisition of equipment, consequently, all interest is considered business interest. In 2016, compensation of $80,000 was paid to Fox. Allen and Rowland each received compensation of $40,000. Dividends were paid to owners as follows:Fox - $60,000; Allen - $36,000; Rowland - $24,000. There was no distribution of any non-cash property. The equipment loan is nonrecourse debt to the shareholders. All initial equity contributions and additional paid-in capital were contributed by shareholders according to their ownership share which is as follows: Fox - 50%; Allen - 30%; Rowland 20%. None of the stockholders sold any portion of their ownership interests during the year. The company has no available tax credits and is not subject to AMT. The company's operations are entirely limited to the geographic areas of North Carolina, Georgia, and South Carolina. All shareholders are U.S. citizens. The corporation had no foreign operations, no foreign bank accounts, and no interest in any foreign trusts or foreign corporations. The company's stock is not publicly traded. The corporation is not subject to the consolidated audit procedures. The company files its federal tax return in Cincinnati, Ohio. Michael Fox lives at 415 Knight Ct., Charlotte, NC 28215, Rachel Allen lives at 692 Radford Dr., Concord, NC 28025; and Hannah Rowland lives at 342 Coastal Rd., Charlotte, NC 28230. No ownership changes occurred during the year. The company's marketable securities represent small investments (Step by Step Solution
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