CORPORATE INCOME TAX RETURN PROBLEM Jim Hasenfus (SS# 987-65-4321) is the president and sole shareholder of Hasenfus Contractors, Inc. (ID # 16-2710389). The business is located at 10 Bridgewater Street, Brooklyn, NY, 11222. The business is engaged in the retail Sail of building materials and supplies. The company uses the accrual method of accounting. The company began operations on was incorporated and began operations on January 2, 2011. Its business code is 444190. The company's financial statements appear in the following pages. Other Necessary Facts 1) The company had estimated federal income taxes per the books amounting to $3,383,240. The company actually prepaid $845,810 in federal taxes every quarter. This is reported on Form 1120, Line 33. by The company's financial accounting income was $2,483,937. This is reported on Schedule M1, Line 1, and Schedule M2, Line 2 6) The company had tax exempt interest amounting to $221,385. This is reported on Schedule M1, Line 7 4) The company had no capital gains this year but have excess capital losses amounting to $2,253,776. This is reported on Schedule M1. Line 3 5) The accelerated depreciation deduction for tax purposes was $600,000, which is $167.500 more than the depreciation claimed on the books. The $167,500 difference is reported of Schedule M1, Lino 8. The $600,000 is reported on Form 1120, Lino 20. L6) Unearned Revenue for the year amounted to $15.799. This is reported on Form 1120, Line 10 and Schedule M1, Line 7) The company paid Jim a dividend of S1,872,618. The company had sufficient earnings and profits to pay the dividend. This is reported on Schedule M2, Line 5a. a) The corporation's deduction for charitable contributions is well below the 10 percent limitation 9) You will NOT report the income tax expense per the books on Schedule M1, 21ne 2 You will instead report the actual tax liability on Line 31 on Form 1120, Page 1 Required Repora Hasentus Contractors, Inc.'s Federal Corporation Income Tax Return for the current year Sales Returns Allowances Less Sales Discounts Net Sales Where Reported 1129 12,250,083 272471 373.100 545.851 11.504232 Line to Unic 3,990,000 Cost of Goods Sold Inventory 1/1 Add Purchase chase Discounts Nurcas Cast of Good for sale Les entory, 12/31 Cost of Goods Sold 3.517.000 255355 1170 Gross Profit 9.167.169 Line Operating Administrative Employee Salates Once Compensation State local income Tax State & Local Property Taves State Local Sales Taxes & Maintenance Depreciation adeo Office pense Legal Fees Hank Service Charge surance Expense LOUISHO 577.610 374,271 271,773 165,04 14 77.000 32.500 3.94 20,099 430 1.320 240 017 46.602 Une 11 Line Line 12 in 14 16 5000,000 on line 10 Line 15 Line Line 26 Une 26 Line 26 Une Line 16 Lite Accuees was SWNTO ond Other Revenues & Gains Dividends Received from 30% owned domestic corporation Tax Exempt interest Interest Revenue from Bank Accounts 12.100) 2,479 6016 145.650 221.265 Line 4 Lines 6.004997 Other Expenses & Losses Bond Interest Expense interest on Mortgage 32good .820 Lime 18 ore 13,57 5,867,177 Net Income Before Income Taxes Less Estimated Federal income Tax Expense per Books 3.383.240 2,483,937 Net Income Per Books Line 15 Line 17 Line 18 Line 10 Liabilities & Stockholders Equity Llabilities Accounts Payable Notes Payable within 1 year Salaries Payable Sales Taxes Payable Payroll Taxes Payable income Taxes Payable Long Term Mortgage Uneamed Revenue 89 Bonds Payable, due 2027 Mortgage Interest Payable Bond Interest Payable Total Liabilities 680,000 $75.000 808,372 49.001 260,000 367.000 771.000 355,473 600.000 24,310 48.000 4,535,156 635,000 471,000 779,271 47,150 272,000 340,000 525,000 371,272 600,000 17,826 Line 13 Line 20 Line 1 une 20 Loe 18 Line 18 4,206,522 Stockholders' Equity Common Stock. 50.10 Par Value, 20.000.000 shares authorized, 3.500.000 shares issued and outstanding Additional Paid in Capital Retained Earnings Total Stockholders' Equity Total Liabilities & Stockholders' Equity 300,000 303,000 3,454940 4,557,940 9.096,096 350.000 901.000 4,066,259 5,317,259 9,523,786 Une 126 Une 23 Line 25 Fm1120 Finale Tb 1c Income 13 U.S. Corporation Income Tax Return ON 1545-0 Department of the Treasury For calendar year 2017 or tax year beginning , 2017, ending Go to www.in.gov/Form1120 for instructions and the latest Information 2017 A Check it Ta Deum Employer identification member och form TYPE Unico OR Number street and room or sure. TaP.O.Boxstructions De corpored 2 PRINT tach Sen Oly or town state or province, country, and I are postcode Toutons 3 Personal i com $ 4 SM- E Check 10 Add change 1a Gross receipts or sales ta b Returns and allowances Balance. Subtract line 1b from linea 2 Cost of goods sold attach Form 1125-A). 2 3 Gross profit. Subtract line 2 from line 10 3 Dividends (Schedule Cine 19) 4 5 Interest 5 6 Grossrents 6 7 Gross royalties a Capital gain net income (attach Schedule D Form 1120) 8 9 Net gain or loss) from Form 4797, Part I line 17 (attach Form 4797) 10 Other income se instructions-attach statement) 10 Total income. Addines 3 through 10 12 Compensation of officers see instructions-attach Form 1125 12 13 Salaries and wages fess employment credits) 14 Repairs and maintenance 14 15 Bad debits 15 16 17 Taxes and licenses 18 Interest 18 19 Charitable contributions 19 Depreciation from Form 4562 not claimed on Form 11:25-Acreewhere on return latach Form 4562 20 21 Depletion 21 Advertising 22 Pension, profit-sharing, etc. plans 23 24 Employee benefit programs 24 25 Domestic production activities deduction attach Form 8903) 25 Other deductions (attach statement 27 Total deductions. Add lines 12 through 26 27 Taxable income before net operating los deduction and special deductions. Subtractine 27 from line 15 230 Net operating loss deduction (see instructions Special deductions (Schedule Cine 20 Add lines 29 and 296 296 30 Taxable income. Subtract line 29c from line 28. See instructions 30 31 Total tax (Schedule J. Part , line 11). 31 32 Total payments and refundable credits (Schedule J. Part I. line 21 32 33 Estimated tax penalty. See instructions. Check Form 2220 is attached 33 Amount owed. Itine 32 is smaller than the total of lines 31 and 33, enter amount owed 34 Overpayment. I line 32's larger than the total of lines 31 and 33, enter amount overpad 35 Enter amount from line 35 you want Credited to 2018 estimated tax Refunded read Sign Here thet Signature of com Date Se on No Te Rents 10 Deductions (See instructions for Imitations on deductions CORPORATE INCOME TAX RETURN PROBLEM Jim Hasenfus (SS# 987-65-4321) is the president and sole shareholder of Hasenfus Contractors, Inc. (ID # 16-2710389). The business is located at 10 Bridgewater Street, Brooklyn, NY, 11222. The business is engaged in the retail Sail of building materials and supplies. The company uses the accrual method of accounting. The company began operations on was incorporated and began operations on January 2, 2011. Its business code is 444190. The company's financial statements appear in the following pages. Other Necessary Facts 1) The company had estimated federal income taxes per the books amounting to $3,383,240. The company actually prepaid $845,810 in federal taxes every quarter. This is reported on Form 1120, Line 33. by The company's financial accounting income was $2,483,937. This is reported on Schedule M1, Line 1, and Schedule M2, Line 2 6) The company had tax exempt interest amounting to $221,385. This is reported on Schedule M1, Line 7 4) The company had no capital gains this year but have excess capital losses amounting to $2,253,776. This is reported on Schedule M1. Line 3 5) The accelerated depreciation deduction for tax purposes was $600,000, which is $167.500 more than the depreciation claimed on the books. The $167,500 difference is reported of Schedule M1, Lino 8. The $600,000 is reported on Form 1120, Lino 20. L6) Unearned Revenue for the year amounted to $15.799. This is reported on Form 1120, Line 10 and Schedule M1, Line 7) The company paid Jim a dividend of S1,872,618. The company had sufficient earnings and profits to pay the dividend. This is reported on Schedule M2, Line 5a. a) The corporation's deduction for charitable contributions is well below the 10 percent limitation 9) You will NOT report the income tax expense per the books on Schedule M1, 21ne 2 You will instead report the actual tax liability on Line 31 on Form 1120, Page 1 Required Repora Hasentus Contractors, Inc.'s Federal Corporation Income Tax Return for the current year Sales Returns Allowances Less Sales Discounts Net Sales Where Reported 1129 12,250,083 272471 373.100 545.851 11.504232 Line to Unic 3,990,000 Cost of Goods Sold Inventory 1/1 Add Purchase chase Discounts Nurcas Cast of Good for sale Les entory, 12/31 Cost of Goods Sold 3.517.000 255355 1170 Gross Profit 9.167.169 Line Operating Administrative Employee Salates Once Compensation State local income Tax State & Local Property Taves State Local Sales Taxes & Maintenance Depreciation adeo Office pense Legal Fees Hank Service Charge surance Expense LOUISHO 577.610 374,271 271,773 165,04 14 77.000 32.500 3.94 20,099 430 1.320 240 017 46.602 Une 11 Line Line 12 in 14 16 5000,000 on line 10 Line 15 Line Line 26 Une 26 Line 26 Une Line 16 Lite Accuees was SWNTO ond Other Revenues & Gains Dividends Received from 30% owned domestic corporation Tax Exempt interest Interest Revenue from Bank Accounts 12.100) 2,479 6016 145.650 221.265 Line 4 Lines 6.004997 Other Expenses & Losses Bond Interest Expense interest on Mortgage 32good .820 Lime 18 ore 13,57 5,867,177 Net Income Before Income Taxes Less Estimated Federal income Tax Expense per Books 3.383.240 2,483,937 Net Income Per Books Line 15 Line 17 Line 18 Line 10 Liabilities & Stockholders Equity Llabilities Accounts Payable Notes Payable within 1 year Salaries Payable Sales Taxes Payable Payroll Taxes Payable income Taxes Payable Long Term Mortgage Uneamed Revenue 89 Bonds Payable, due 2027 Mortgage Interest Payable Bond Interest Payable Total Liabilities 680,000 $75.000 808,372 49.001 260,000 367.000 771.000 355,473 600.000 24,310 48.000 4,535,156 635,000 471,000 779,271 47,150 272,000 340,000 525,000 371,272 600,000 17,826 Line 13 Line 20 Line 1 une 20 Loe 18 Line 18 4,206,522 Stockholders' Equity Common Stock. 50.10 Par Value, 20.000.000 shares authorized, 3.500.000 shares issued and outstanding Additional Paid in Capital Retained Earnings Total Stockholders' Equity Total Liabilities & Stockholders' Equity 300,000 303,000 3,454940 4,557,940 9.096,096 350.000 901.000 4,066,259 5,317,259 9,523,786 Une 126 Une 23 Line 25 Fm1120 Finale Tb 1c Income 13 U.S. Corporation Income Tax Return ON 1545-0 Department of the Treasury For calendar year 2017 or tax year beginning , 2017, ending Go to www.in.gov/Form1120 for instructions and the latest Information 2017 A Check it Ta Deum Employer identification member och form TYPE Unico OR Number street and room or sure. TaP.O.Boxstructions De corpored 2 PRINT tach Sen Oly or town state or province, country, and I are postcode Toutons 3 Personal i com $ 4 SM- E Check 10 Add change 1a Gross receipts or sales ta b Returns and allowances Balance. Subtract line 1b from linea 2 Cost of goods sold attach Form 1125-A). 2 3 Gross profit. Subtract line 2 from line 10 3 Dividends (Schedule Cine 19) 4 5 Interest 5 6 Grossrents 6 7 Gross royalties a Capital gain net income (attach Schedule D Form 1120) 8 9 Net gain or loss) from Form 4797, Part I line 17 (attach Form 4797) 10 Other income se instructions-attach statement) 10 Total income. Addines 3 through 10 12 Compensation of officers see instructions-attach Form 1125 12 13 Salaries and wages fess employment credits) 14 Repairs and maintenance 14 15 Bad debits 15 16 17 Taxes and licenses 18 Interest 18 19 Charitable contributions 19 Depreciation from Form 4562 not claimed on Form 11:25-Acreewhere on return latach Form 4562 20 21 Depletion 21 Advertising 22 Pension, profit-sharing, etc. plans 23 24 Employee benefit programs 24 25 Domestic production activities deduction attach Form 8903) 25 Other deductions (attach statement 27 Total deductions. Add lines 12 through 26 27 Taxable income before net operating los deduction and special deductions. Subtractine 27 from line 15 230 Net operating loss deduction (see instructions Special deductions (Schedule Cine 20 Add lines 29 and 296 296 30 Taxable income. Subtract line 29c from line 28. See instructions 30 31 Total tax (Schedule J. Part , line 11). 31 32 Total payments and refundable credits (Schedule J. Part I. line 21 32 33 Estimated tax penalty. See instructions. Check Form 2220 is attached 33 Amount owed. Itine 32 is smaller than the total of lines 31 and 33, enter amount owed 34 Overpayment. I line 32's larger than the total of lines 31 and 33, enter amount overpad 35 Enter amount from line 35 you want Credited to 2018 estimated tax Refunded read Sign Here thet Signature of com Date Se on No Te Rents 10 Deductions (See instructions for Imitations on deductions