Comprehensive Problem 1 - Part 2: Schedule C, Schedule SE, Schedule D, and Qualified Dividends and Capital Gains Tax Worksheet Note: This problem is divided into three parts. You will need to complete some of the forms in the other parts in order to determine the amounts to be used on Form 1040. Some of the data information will be reproduced in the other parts for convenience. Enter all amounts as positive numbers, except for a "loss". If required, enter a "loss" as a negative number on the tax form. If an amount box does not require an entry or the answer is zero, enter "O". On Schedule SE, when required, round amounts to the nearest dollar. Use the rounded amounts in subsequent computations. Information regarding Noah's pet store business is reproduced here. Noah's pet store is located at 1415 S. Patterson Blvd, Dayton, OH 45409. The name of the store is "The Arc," and its taxpayer identification number is 95-9876556. Since you handle Noah's bookkeeping, you have printed the income statement from your Quickbooks software, shown in the table below. The Arc did not claim the COVID-related provisions for the employee retention credit or sick and family leave credits but Noah did defer his self-employment taxes related to The Arc. He estimates 77.5 percent of the profits can be allocated to the period March 27, 2021 through December 31, 2021. The Arc 95-9876556 Income Statement For the Year Ended December 31, 2021 Revenue: Gross Sales $144,000.00 Less: Sales Returns and Allowances Net Sales $144,000.00 Cost of Goods Sold: Beginning Inventory $10,500.00 Add: Purchases 62,200.00 $72,700.00 Less: Ending Inventory 10,100.00 Cost of Goods Sold 62,600.00 Gross Profit (Loss) $81,400.00 Expenses: Dues and Subscriptions Estimated Federal Tax Payments 4,000.00 Estimated State Tax Payments 3,900.00 Insurance 3,950.00 Meals and Entertainment 1,500.00 Miscellaneous Payroll Taxes 3,800.00 Professional Fees 1,700.00 Rent 8,400.00 Travel 1,250.00 Utilities 1,300.00 25,000.00 Vehicle Expenses Wages Total Expenses Net Operating Income 54,800.00 $26,600.00 Details of The Arc's meals and entertainment: $400 Restaurant meals associated with business travel 300 Arc employee holiday party 200 Restaurant overtime meals for employees 600 Sports tickets for entertaining large customers $1,500 Charlotte Squab Financial Services 123 Wall Street New York, NY 10005 Joan and Noah Arc 1265 W. Riverview Avenue Dayton, OH 45402 SSN: 456-87-5432 Date December 31, 2021 Dividends Box la Ordinary Dividends Box 1b Qualified Dividends Box 4 Federal Income Tax withheld Box 7 Foreign Tax Paid Box 11 Tax. exempt Dividends Payor ExxonMobil Box 2a Cap Gain Distab 0.00 0.00 325.00 325.00 0.00 0.00 0.00 Texas Util. 1,210.00 1,210.00 0.00 0.00 0.00 CS Growth Fund 395.00 395.00 260.00 0.00 30.00 0.00 Stock Transactions Box 1a Box 1b Box 1c Box 1d Box le Box 2 Description Date Ace. Date Sold Net Proceeds 4,500.00 Basis (reported to IRS) Character 100 shs, Blue Corp. 02/11/2011 08/15/2021 2,600.00 LT 50 shs. Yellow Corp. 6,200.00 5,400.00 ST 01/13/2021 06/05/2021 10/02/2012 10/07/2021 25 sbs, Red Co. 12,200.00 1,700.00 LT Comprehensive Problem 1 - Part 2: Schedule C, Schedule SE, Schedule D, and Qualified Dividends and Capital Gains Tax Worksheet Note: This problem is divided into three parts. You will need to complete some of the forms in the other parts in order to determine the amounts to be used on Form 1040. Some of the data information will be reproduced in the other parts for convenience. Enter all amounts as positive numbers, except for a "loss". If required, enter a "loss" as a negative number on the tax form. If an amount box does not require an entry or the answer is zero, enter "O". On Schedule SE, when required, round amounts to the nearest dollar. Use the rounded amounts in subsequent computations. Information regarding Noah's pet store business is reproduced here. Noah's pet store is located at 1415 S. Patterson Blvd, Dayton, OH 45409. The name of the store is "The Arc," and its taxpayer identification number is 95-9876556. Since you handle Noah's bookkeeping, you have printed the income statement from your Quickbooks software, shown in the table below. The Arc did not claim the COVID-related provisions for the employee retention credit or sick and family leave credits but Noah did defer his self-employment taxes related to The Arc. He estimates 77.5 percent of the profits can be allocated to the period March 27, 2021 through December 31, 2021. The Arc 95-9876556 Income Statement For the Year Ended December 31, 2021 Revenue: Gross Sales $144,000.00 Less: Sales Returns and Allowances Net Sales $144,000.00 Cost of Goods Sold: Beginning Inventory $10,500.00 Add: Purchases 62,200.00 $72,700.00 Less: Ending Inventory 10,100.00 Cost of Goods Sold 62,600.00 Gross Profit (Loss) $81,400.00 Expenses: Dues and Subscriptions Estimated Federal Tax Payments 4,000.00 Estimated State Tax Payments 3,900.00 Insurance 3,950.00 Meals and Entertainment 1,500.00 Miscellaneous Payroll Taxes 3,800.00 Professional Fees 1,700.00 Rent 8,400.00 Travel 1,250.00 Utilities 1,300.00 25,000.00 Vehicle Expenses Wages Total Expenses Net Operating Income 54,800.00 $26,600.00 Details of The Arc's meals and entertainment: $400 Restaurant meals associated with business travel 300 Arc employee holiday party 200 Restaurant overtime meals for employees 600 Sports tickets for entertaining large customers $1,500 Charlotte Squab Financial Services 123 Wall Street New York, NY 10005 Joan and Noah Arc 1265 W. Riverview Avenue Dayton, OH 45402 SSN: 456-87-5432 Date December 31, 2021 Dividends Box la Ordinary Dividends Box 1b Qualified Dividends Box 4 Federal Income Tax withheld Box 7 Foreign Tax Paid Box 11 Tax. exempt Dividends Payor ExxonMobil Box 2a Cap Gain Distab 0.00 0.00 325.00 325.00 0.00 0.00 0.00 Texas Util. 1,210.00 1,210.00 0.00 0.00 0.00 CS Growth Fund 395.00 395.00 260.00 0.00 30.00 0.00 Stock Transactions Box 1a Box 1b Box 1c Box 1d Box le Box 2 Description Date Ace. Date Sold Net Proceeds 4,500.00 Basis (reported to IRS) Character 100 shs, Blue Corp. 02/11/2011 08/15/2021 2,600.00 LT 50 shs. Yellow Corp. 6,200.00 5,400.00 ST 01/13/2021 06/05/2021 10/02/2012 10/07/2021 25 sbs, Red Co. 12,200.00 1,700.00 LT