Comprehensive Problem 5-77 (LO 5-1, LO 5-2, LO 5-3) (Algo) The following information applies to the questions displayed below.) Diana and Ryan Workman were married on January 1 of last year. Diana has an eight-year-old son, Jorge, from her previous marriage. Ryan works as a computer programmer at Datafile Incorporated (DI) earning a salary of $104,500. Diana is self-employed and runs a day care center. The Workmans reported the following financial information pertaining to their activities during the current year. a. Ryan earned a $104,500 salary for the year. b. Ryan borrowed $13,700 from Dl to purchase a car. De charged him 2 percent interest ($274) on the loan, which Ryan paid on December 31. DI would have charged Ryan $890 if interest had been calculated at the applicable federal interest rate. Assume that tax avoidance was not a motive for the loan. c. Diana received $2,850 in alimony and $6.200 in child support payments from her former husband. They divorced in 2016. d. Diana won a $1,070 cash prize at her church-sponsored Bingo game. e. The Workmans received $1,350 of interest from corporate bonds and $1,100 of interest from a municipal bond. Diana owned these bonds before she married Ryan. 1. The couple bought 84 shares of ABC Incorporated stock for $57 per share on July 2. The stock was worth $81 a share on December 31. The stock paid a dividend of $1 per share on December 1 9. Diana's father passed away on April 14. She inherited cash of $67,000 from her father and his baseball card collection, valued at $3,700. As the beneficiary of her father's life insurance policy, Diana also recelved $167,000. h. The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of $2,900. 1. Ryan received $3,800 cash for reaching 10 years of continuous service at DI. J. Ryan was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $9,400 from his disability insurance, Dl paid the premiums for Ryan, but it reported the amount of the premiums as compensation to Ryan on his year-end W-2. k. The drunk driver who hit Ryan in part was renuired to this ? 1. Ryan receive ,OU LOSTI GLI YA UI LUFTITUUS VILE OLUL. 1. Ryan was hit and injured by a drunk driver while crossing a street at a crosswalk. He was unable to work for a month. He received $9,400 from his disability insurance. Di pald the premiums for Ryan, but it reported the amount of the premiums as compensation to Ryan on his year-end W-2. k. The drunk driver who hit Ryan in part (1) was required to pay his $3,700 medical costs, $3,200 for the emotional trauma he suffered from the accident, and $8,400 for punitive damages. 1. For meeting his performance goals this year, Ryan was informed on December 27 that he would receive a $6700 year- end bonus. DI (located in Houston, Texas) mailed Ryan's bonus check from its payroll processing center (Tampa, Florida) on December 28. Ryan didn't receive the check at his home until January 2. m. Diana is a 10 percent owner of MNO Incorporated, a Subchapters corporation. The company reported ordinary business income for the year of $126,000. Diana acquired the MNO stock two years ago n. Diana's day care business collected $120,000 in revenues. In addition, customers owed her $11,500 at year-end. During the year, Diana spent $14,000 for supplies, $10,000 for utilities, $32,000 for rent, and $1,350 for miscellaneous expenses. One customer gave her use of his vacation home for a week (worth $11,000) in exchange for Diana allowing his child to attend the day care center free of charge. Diana accounts for her business activities using the cash method of accounting o. Ryan's employer pays the couple's annual health insurance premiums of $14,000 for a qualified plan. Comprehensive Problem 5-77 Part 2 (Algo) 2. Complete page 1 of Form 1040 through line 9 and Schedule 1 for the Workmans (for filing MFJ). (Input all the values as positive numbers. Enter any non-financial information, (e.g. Names, Addresses, social security numbers) EXACTLY as they appear in any given information or Problem Statement. Do not skip rows, while entering in Deductions section of Form 1040 PG1. Ken does not wish to contribute to the Presidential Election Campaign fund or did not have any virtual currency transactions or interests. Assume the dividends are qualified dividends. Neither Ryan nor Diana wish to contribute to the Presidential Election Campaign fund or had any virtual currency transactions or interests.) Check my work Ryan address is 19010 NW. 135th Street, Social security numbers Ryan: 111-22-3333 Diana: 222-33-4444 Jorge: 333.44-5555 1040 for a couple Married Filing Jointly with one dependent 1040 PG1 Schedule 1 Form 1040 Page 1 Department of the Treasury Internal Revenue Service (80) Form 1040 U.S. Individual Income Tax Return 2020 OMB No 1545-0014 RS Use Only Do not want Statue Osim Marted the only Ourred ting ey) Head household OH Oy you checked et boter the name of you you checked I HOHOW box, enter the child's name the line on O box acto your dependent You and middel Lane Your social security number rustamendid Late Spessoal erity number Homemben if you have a PO box Apt no Presidential Lection Campaign Check my work Foruyan For Forpore You At any time during 2020. did you receive to send exchange or otherwise gay financial interest in any currency? ) Standard You as dependent Deduction spouse tantum or you when Aindrase You Wer bomberry 2.1051 Arabad po We bombolery 2.15 Dependent instructions 21 Social urub all you How Lala Credit for the or that penda Wspoma AS 20 BOGUE That Ona vid Timur 48 50 That amount Odde IRA sa Pensions and annut cerity bene Capital Amount Oh come from scheine Ados 27 and This is your home 10 Are to come From Schedule 22 Chaeton you take the water declined Standard Deduction for Single Married Singer $12.400 .Marrone yoriting wowe 100 . 2 9 100 100 Internal Revenue Service Name() shown on Form 1010 1040-5R 1040-NR Go to www.irs.gov/Form1040 for instructions and the latest Information Your social security Parti 1 1 20 20 3 3 4 4 5 5 . 7 7 Additional Incomo Test unds, credit, offset of state and local income Alimony received Date of original divorce or separation Agen (se non Business income or Altach Schedule Other gains roes)Attach Form 4797 Ronta crow estate, royantes, partnershipa s corporation, sts, etc. Atuch schedule For nomor (loan). Atach Schedule Unemployment compensation Other income List type and amount Combine free through. Entet here and on Form 1040, 040-5R, Or 1040 NA, line Adjustments to Income Educator expenses Curtan business expenses of reserva, perting and former Attach Form 2106 Her vaccount deduction Atoch om Moving experies for inembers of the Armed Forces Artacho 3003 Deductible part of sellepkoyment lux. Alach Schedules Self employed SEP SIMPLE and qualified plane Sed hendedoxin Pyn wy with long Part II 10 11 12 10 11 13 14 14 15 16 17 17 0 Income Usl type and amount Combine the through 8 Enterhore and on Form 1040, 1040 SR or 1040-NR. 8 Part II Adjustments to Income 10 Educator expenses 10 11 Certain ainess experts of reservists, performing artists, and for basis goverment officials. Attach Form 2100 11 12 Health savings account deduction Attach Form 6889 12 13 Moving expenses for members of the Armed Forces Attach Form 3003 13 14 Deductible part of it employment tax. Atach Schedule SE 14 15 Soll employed SEP, SIMPLE, and qualified plans 15 16 Self-employed howthrourante deduction 16 17 Peraly on early withdrawal of saving 17 18 Almony paid 18 Recipient's SSN Date of original divorce or reparation agreement (scentruction) 10 IRA deduction 19 20 Student loan interest deduction 20 21 Tuition and fous deduction Altach Form 1917 21 Add Ines 10 through 21. These are your adjustments to income Enter hare and on Form 1040 1040-SR or 1040-NR. Ine 10 22 Paperwork Reduction Act Notice, see your tax return instructions Cat. No: 71470F Schedule 1 (Form 10402020 THIS FORM IS A SIMULATION OF AN OFFICIAL US. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2021 McGraw-Hill Education