Comprehensive Problem 11-1

Olive Corporation was formed and began operations on January 1, 2018. The corporation's income statement for the year and the balance sheet at year-end are presented below.

The corporation made estimated tax payments of $5,000 and the corporation's book federal income tax expense is equal to the federal tax liability. Assume any overpayment is credited to the 2019 estimated tax.

Required: Prepare Form 1120.

1. Enter all amounts as positive numbers, except for a "loss". If required, enter a "loss" as a negative number on the tax form.
2. If an amount box does not require an entry, or the answer is zero, enter "0".

The Olive Corporation Income Statement for the Year Ended December 31, 2018 Gross income from Qualified dividends received from a 35 percent-owned domestic corporation $270,000 operations 20,000 $290,000 (110,000) $180,000 Total gross income Cost of goods sold Total income Other expenses: Compensation of officers Salaries and wages Bad debts (direct charge-offs) $77,000 30,000 9,000 3,000 10,000 2,000 16,000 Depreciation for book and tax purposes Payroll taxes (147,000) Total other expenses $33,000 Net income (before federal income tax expense) The Olive Corporation Balance Sheet as of December 31, 2018 $30,000 20,000 70,000 90,000 (10,000) Accounts receivable Inventory (at cost) Less: accumulated depreciation $200,000 Total assets Liabilities and owners' equity: 6,200 85,000 80,000 28,800 Note payable (due in 10 years) Common stock Retained earnings $200,000 Total liabilities and owners' equity